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| Maureen's Monthly |
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Articles and Advice |
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| 2010: year of the turnaround? By Dian Hymer A spurt in home sales in 2009, aided by low interest rates and the first-time homebuyer tax credit, has led some economists to forecast a turnaround in the housing market this year. Other forecasters feel this is too optimistic a projection. Among those who see improvement in the 2010 market is Lawrence Yun, chief economist for the NATIONAL ASSOCIATION OF REALTORS® (NAR). Yun hopes that the extension of the first-time homebuyer tax credit will provide a new pool of buyers to absorb the additional foreclosures that will hit the market this year. He expects existing-home sales to rise 13.6 percent in 2010; home prices should go up 3 to 5 percent, with wide geographic differences. The average rate on 30-year fixed mortgages will range from 5.3 percent in the first quarter to 5.8 percent by year end. This forecast assumes there will be no major economic surprises. The weak job market remains a concern. The Mortgage Bankers Association (MBA) has a slightly different take on the 2010 housing market. MBA predicts existing-home sales will increase approximately 11.2 percent. Interest rates should be about 5.6 percent by the end of 2010. The unemployment rate is expected to peak at 10.2 percent and gradually decline in 2011. National average home prices should stop sliding during the first part of the year and stabilize, depending on area and price range. The November 2009 Economic and Housing Market Outlook from Freddie Mac expects there will be an increase in foreclosures and short sales this year, even though foreclosures declined significantly in some of the worst foreclosure markets (like Las Vegas) at the end of last year. RealtyTrac reported that foreclosures nationwide decreased 8 percent in November 2009. Zillow.com, an online real estate marketplace, reported in December 2009 that stabilization and increased home prices were found in 48 of the 154 markets tracked. However, Zillow forecasts a decline in demand as interest rates rise. Foreclosures are expected to stay high and could challenge recent stabilization. Some economists think prices will continue to decline in some areas through this year. Others feel that at best, the economic and housing recovery will be a bumpy ride. And, we could bounce along the bottom for some time. Few expect home prices to rebound quickly. HOUSE HUNTING TIP: There will be significant variation from one market to the next. Areas that have a good diversified economic base and limited inventory of homes for sale could stabilize in 2010 and see an improvement in home prices. Areas that are bloated with foreclosure and short-sale inventory and have a weak local economy probably won't see a turnaround this year. Credit tightening would put a damper on the market. On Dec. 12, 2009, Fannie Mae took steps to make mortgage qualification more difficult. A significant change is that the maximum allowable debt-to-income ratio is being lowered to 45 percent from up to 64 percent. This means that the housing cost plus all other debt can't exceed 45 percent of the borrower's income. Buyers with strong credit and assets have a chance of approval with a debt-to-income ratio of 50 percent. 2010 is not expected to be a banner year for housing. But it could be a year of improvement for some niche markets and some price ranges. Expect to see more purchase offers made contingent on the sale of the buyers' home. Credit tightening has made it impossible for most buyers to qualify to own two homes at once. There will likely be an increase in short-sale listings. Buyers have shied away from these listings in the past because they took so long to process, and were often denied by the lender. Lenders are now more open to approving short sales than they were a year ago. THE CLOSING: Hopefully, they'll improve their performance in 2010. Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author. |
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| No capital gains tax on home exchange? By Benny Kass DEAR BENNY: My husband and I built a townhouse in 1983 for $33,000. We lived there for a few years and then rented it out for 17 years, taking all the tax advantages such as depreciation, etc. In 2003 we sold it for $90,000, and did a like-kind exchange with a house that my husband built. That house has been rented for the past six years and now has a market value of $190,000. We have no liens on the home and would like to sell it and put the money towards our dream home. If we moved into the home and lived there for two years, would we have to pay capital gains taxes when we sell the home? We've asked our certified public accountant (CPA) and she said we would have to pay capital gains because we took depreciation on the properties. We also asked a friend who worked for the Internal Revenue Service and he said as long as we lived in the home for at least two out of the last five years before we sold the home, we would not have to pay capital gains tax. Who is correct? --Jeanne DEAR JEANNE: I believe your CPA is correct. Any depreciation that you took after May 6, 1997, will be taxed. And based on a new 2008 tax law, the gain must be allocated between the rental and the personal use starting after Dec. 31, 2008. The portion of the gain allocated to the rental period will be taxed. I would always follow the advice of your paid accountant, rather than that of a friend, even if he or she works for the IRS. DEAR BENNY: My husband and I just signed documents to refinance our home. The entire process was long and frustrating. The appraisal was done a month ago, but the lender never notified us that the appraisal value was lower than what we needed to refinance. We found this out almost one month afterwards and only after we called to ask how things were going. The communication with the lender was extremely poor, but that wasn't the biggest problem. The lower appraisal value meant we had to pay down the loan by $20,000 in order to refinance. Our house has three bedrooms, and four of the six sales comps were two-bedroom houses. Adjustments were made only for the overall square footage, not for the number of bedrooms. We felt the amount was inaccurate for our area and asked the lender to have the appraisal reviewed. I gave the lender additional comps and the same appraiser replied with a second report with no change in value. There were numerical discrepancies between both reports. One comp ended up with a higher value, as the first report omitted to make any adjustments. I contacted both the lender and appraiser by e-mail and did not receive a response to these errors. In the past few weeks a house in our neighborhood of similar size and lot has sold for more than $100,000 above what our house was valued at. I looked at the open house and this house had only one bathroom and a single garage compared to our two bathrooms and double garage. In order for that house to sell, it would have had to appraise at the amount offered. I've read all sorts of stories about low appraisals happening, but these appraisals affect homeowners from refinancing and buying a home. Have we been wronged and is there anything we can do? If an appraisal is so important to the loan process, it should at the least be correct and not contain errors. --Maileen DEAR MAILEEN: I can't agree with you more. Although appraisals are not an exact science, they are crucial to the selling, buying and refinancing process. But the appraisal process has been dramatically changed in the past year. As a result of a compromise agreement between the New York Attorney General and the major mortgage secondary lenders such as Fannie Mae and Freddie Mac, mortgage lenders have much less impact on how appraisals should come in. Most lenders are now required to follow what is known as the "Home Valuation Code of Conduct." Perhaps the most significant part of this new code is that mortgage lenders cannot select an appraiser. The lender must contact an appraisal company who will assign an independent appraiser to prepare the valuation report. What do you do if you are not satisfied with the appraisal? Eventually, an Independent Valuation Protection Institute will be established that will have the authority to review all such complaints. However, that entity has yet to be created. So in the meantime, if you get no satisfaction after talking with your lender, you can complain to Freddie or Fannie. The Federal Housing Administration (FHA) has not adopted the code, so if your loan is backed by FHA, complain directly to the local FHA office in your area. These new procedures have created major problems for the lending community and for homebuyers and homeowners. However, the underlying concept is important: Appraisals should be totally independent and not based on what a mortgage lender would like to hear so that he can make any loan -- no matter how bad it may be. DEAR BENNY: We own a commercial condo building that we bought in 1985. If we sell it now, not only do we have to pay capital gains tax, but also recapture all of the depreciation we have taken on it over the years. It is still used in our business, but it is pretty much totally depreciated, so almost all of the sales price would be subject to recapture as far as I understand. Will a 1031 Starker exchange help us in any way if we decide to sell this location? The only reason we would consider selling it is that the parking situation there is getting more and more crowded, but we don't have to sell. What is your advice? --Caleb DEAR CALEB: Yes, a Section 1031 exchange (also known as a Starker exchange) should be considered if you really want to get rid of that property. You would have to carefully follow the rules, because they are strict. For example, when you sell that property, you cannot have any access to the sales proceeds. They have to be put in escrow to be used only to buy the new property. The replacement property must be identified within 45 days from the date you sold the relinquished property, and you must take title to the new property within 180 days from the date of the earlier sale. Keep in mind that a 1031 exchange does not mean that you avoid paying any capital gains tax. Your tax basis from the relinquished property becomes the tax basis of the replacement property. Thus, you only defer, not avoid, paying the tax. This is complicated and you must talk with a tax attorney who understands the process. Benny L. Kass is a practicing attorney in Washington, D.C., and Maryland. No legal relationship is created by this column. |
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| Backup offers give sellers a Plan B By Dian Hymer Every seller's dream is to receive offers from more than one buyer. Although multiple offers were scarce last year, in some markets and price ranges listings that are priced right are receiving multiple offers, particularly in the low-end foreclosure markets. Most sellers are inclined to accept the highest-priced offer, but this isn't always the best offer. For example, a seller of a hot property in the hills above Oakland, Calif., received six offers. The two highest offers were close in price, but the seller decided to accept the higher of the two. Fortunately, the seller's agent suggested countering the next best offer for backup position. The buyer in primary position had 10 percent cash for a downpayment. Some issues came up during inspections that were going to be costly to repair. The buyer didn't have more cash to pay for the repairs, so he asked the seller to lower the price. The seller said no and the backup offer became the primary offer. The backup buyer made a large cash downpayment; he wasn't cash-strapped like the first buyer. He had enough cash to pay for the repairs. In this case, the backup offer, which wasn't originally the highest offer, turned out to be the best offer both in terms of price and financing. Before making a decision about which offer to accept, it's important to review all of the terms and conditions of the contracts, not just the price. In another case, a seller received two offers. One was quite a bit higher than the other. After reviewing the highest-priced offer, it turned out that the price wasn't as high as it seemed. The agent representing the buyers was from out of the area and didn't know how fees associated with a home sale were customarily shared between the buyer and seller. In terms of net proceeds to the seller, the offer price was $10,000 less than it would have been if the offer included an allocation of fees that was according to local custom. HOUSE HUNTINTG TIP: Sellers who receive multiple offers often are tempted to counter for a higher price, even when the offer prices are for more than the list price. This is risky. In one case, a seller received two offers. The highest-priced offer was for more than the list price. The seller countered this offer at an even higher price. The buyer thought the seller was unreasonable and withdrew his offer. The seller ended up selling for much less. Don't let greed rule your decision-making. The financing proposed in the offers should be scrutinized carefully. In general, the more cash a buyer puts down, the better. Recently a seller reviewed two offers on her house. One of the buyers offered to make a 40 percent cash downpayment. The other was putting five percent down. It's far easier for a buyer to get loan approval in the current market place if the downpayment is 20 percent or more of the purchase price. Close of escrow can be an important factor for some sellers. It can be beneficial for a seller to accept a lower price if the buyer can close quickly. This is particularly so, if the sellers have already purchased and closed on another home. An offer made contingent on the buyers' home selling is riskier than an offer from a buyer who doesn't need to sell in order to buy. Depending on the seller's situation, it might be wise to consider a lower-priced offer that is not contingent on a sale. THE CLOSING: It's a good idea to counter the next-best offer for backup position in case the first deal falls apart. Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author. |
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| Appraisal rules tough on additions By Dian Hymer Recently a homeowner in the hills above Oakland, Calif., applied for a refinance. An appraiser visited the property and measured both levels of the house. The appraiser called the homeowner a few days later to find out if the lower level had been added with a permit. The public record indicated the house had three bedrooms, two bathrooms, and 1,513-square feet. The actual house in its current configuration has four bedrooms, three baths and a recreation room, giving it considerably more square feet than the public record indicates. The owner didn't know if the lower level had been added legally, claiming the house was in its present configuration when he bought it about 30 years ago. Due to changes in appraisal guidelines for residential properties that took effect in 2009, appraisers usually don't give livable square footage credit for work that was done without building permits. Without the extra square footage, the appraised value will be less than it would have been if the work were done legally. This doesn't mean that the lender won't grant a loan. But, if your house appraises low and you were expecting a loan amount based on a higher figure, you'll be disappointed and perhaps unable to complete the refinance -- or, if you're a buyer, you may be unable to purchase. Let's say you wanted a loan for 70 percent of an $800,000 value, or $560,000. The appraisal comes in at $600,000. On a refinance, the lender probably won't lend more than 70 percent of $600,000, or $420,000, which is $140,000 less than what you requested. HOUSE HUNTING TIP: What can you do in a situation like this to increase the appraised value of your home? The first thing to do is go to the local planning department and request copies of all permits on the house going back to the original building permit. If you can find a permit for the additional work that was done, give a copy to the appraiser. The appraiser will have measured the unpermitted square footage. With confirmation that this space is legal, the appraiser will be able to include the additional square feet and increase the appraised value. Take a copy of the permit that confirms more rooms than is reflected in the public record to the county assessor's office and have them update their records. You may be reassessed based on the fact that your house has a legal addition, so your property taxes could increase. However, your house will appraise and sell for more if you can substantiate that the additional space was added with permits. If you discover that the work was done without permits, you can attempt to have the work legalized after the fact. This can be a complicated and expensive project, depending on when the work was done and how many square feet were added. If the addition is 10-20 percent of the size of the house, the permitting process will be less onerous than if the illegal space equaled 50 percent of the entire house. You will need to meet certain code requirements. For example, if a stairway leads to the unpermitted space, it must be 36 inches wide. Replacing an entire staircase can be prohibitively expensive. Walls may have to be opened to inspect the plumbing and electrical. If something doesn't meet current code requirements, it will probably have to be brought into compliance. You might have to add or change windows. Plus, if the building inspector discovers other items in the house that do not comply with current code requirements, you might have to correct these in order to receive final approval of the project. THE CLOSING: Sometimes contractors take out permits for work, but don't take the time to have the final inspection done. In this case, call the contractor and have him finish his job. Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author. |
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| Home prices put to ZIP code test By Dian Hymer The wealth created by the housing bubble has been wiped out, according to Lawrence Yun, chief economist for the NATIONAL ASSOCIATION OF REALTORS®, who spoke at the group's annual conference in November 2009. Does this mean that if you bought your home in 2005 in an area that experienced rapid appreciation from 2004-2007, you'll lose money if you sell today? NAR tracks home-sale price trends nationally and by regions. Relying on national, regional, or even statewide home-sale price data to determine home values in a given micro market could lead to misleading conclusions. Norm Miller, director of the Real Estate Academic Program at the University of San Diego, analyzes several factors to determine the health of housing markets. During a presentation at the UC Berkeley Haas Business School Real Estate and Economics Symposium, Miller advocated a ZIP code analysis to get an accurate picture of the local market. A ZIP code approach can reveal that home-sale price trends in a given ZIP code could be higher or lower than what the widely used S&P/Case-Shiller Home Price Index indicates for the entire city. For example, the Case-Shiller index for Los Angeles in January 2009 was quite a bit lower than it was in Pacific Palisades, a high-demand district in Los Angeles. In addition to other factors, Miller looks at foreclosure sales (REOs) in an area. He believes that foreclosure sales need to be tracked separately from regular sales. The price discounts on REOs in relation to regular sales can run from 25 to 50 percent or more. An abundance of REOs have a big affect on local sale prices. A low number of REOs will have very little, if any, price impact. Although Miller's approach to assessing current home values and where they might be headed is more informative than broader indices currently used, a ZIP code analysis may not be narrow enough to give an accurate picture of a niche market where you are considering buying or selling. It wouldn't work well for large cities like Oakland or San Francisco, where there is significant price variability between neighborhoods and within price ranges. There are micro markets within ZIP codes. HOUSE HUNTING TIP: To obtain an accurate micro-market assessment on which to base a decision about buying or selling at a point in time, you need to find out the following information about home-sale activity in the local neighborhood: • Look at the sales of listings that are similar to one you'd consider buying or selling that closed within the last three months. Did the listings sell close to the asking price or were they discounted? How long did they take to sell? How much inventory is there on the market now? Is the market dominated by REOs and short sales? Your real estate agent can help you with this analysis. • You also need data on pending sales. These are listings that are under contract but have not yet closed. Were there multiple offers? Were they priced higher or lower than the sold listings? If lower, this indicates a declining market. • How much standing inventory of unsold homes is there in the area? More standing inventory gives buyers an advantage because they have a lot to choose from. They can afford to be picky, and they will negotiate for the lowest price possible. Low-inventory, high-demand markets tend to favor sellers, and may have a positive impact on home prices. THE CLOSING: Supply and demand of homes for sale in the area, along with the state of the local economy, have a profound effect on local home prices. Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author. |
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| Short-sale buyers seek closure By Benny Kass DEAR BENNY: Almost six months ago, we made an offer to buy a condominium, under a short-sale arrangement. Our real estate agent called it a clean deal, as we are paying cash and all closing costs. Our agent has called the listing agent and I have called the bank that holds the current mortgage (although they say they cannot discuss this with me for legal reasons) to try to learn why we cannot get an answer to our offer. My wife and I are anxious because we want to resolve this one way or the other. Didn't our president get a new law enacted that is forcing the banks to respond promptly? We need some help, and the bank is dragging its feet. --Bob DEAR BOB: Although the federal government is attempting to get lenders to shorten the time they have in which to respond to short-sale proposals, there currently is no federal law on this subject. However, on Nov. 30, 2009, the U.S. Treasury Department issued guidelines that lenders are encouraged to follow. It is a complex process. Homeowners who are underwater can request that their lender preapprove short-sale terms. Although it is not clear how long the lender (or the servicer of the mortgage) has to respond, once the lender determines the amount it will be willing to accept from a short sale, the borrower has 120 days in which to find a buyer for the property. When the homeowner enters into a sales contract with a potential buyer, and assuming that the lender has already preapproved the terms and conditions for a short sale, the lender must approve or disapprove the short sale within 10 business days after receiving the sales contract. Accordingly, if you are a homeowner in financial trouble, talk with a real estate agent to start the preapproval process. This will take the most time, so you should begin this as soon as possible. There is a lot of paperwork involved that has to be presented to the lender. The Treasury directive requires that once the short sale takes place, the homeowner/seller must be fully released from future liability. This has been a real problem in the past, since many lenders -- after allowing a short sale -- were still going after their borrowers for the deficiency -- the difference between the net sales proceeds and the outstanding balance of the loan. You can access this directive from the Web site of the Home Affordable Modification Program (https://www.hmpadmin.com/portal/index.html). Although lenders are encouraged to follow the guidelines now, technically they do not take effect until April 5, 2010, and will sunset Dec. 31, 2012. DEAR BENNY: I am the president of a condominium association. We are presently experiencing a roof leak from a limited common element (patio over an area of the roof). This area can be accessed only through the owner's unit, as it is on the top floor of the building and is for the owner's use only. Who has the responsibility to repair these leaks: the board or the unit owner? This has not become an issue to date with the owner, but it could in the future and I was wondering how the board should proceed on this matter if it does become an issue. --Dan DEAR DAN: You have called this a patio, and I call it a "roof deck." Either way, it is a limited common element, which means that although it is not within a unit (it is technically located in a common area) not all owners have access to that area. You have to review your association's legal documents and especially the bylaws. Most documents I have seen place the maintenance responsibility on the association. Why? Because if someone were injured or the property were damaged as a result of a problem coming from a limited common element, the association would be sued (as well as the unit owner who owned the limited common element), and could be found liable and required to pay a lot of money. Additionally, the unit owner may decide not to do the repairs, and further damage would result. Access to the roof should not be a problem. If the unit owner refuses to allow a contractor access through his unit so as to get to the roof, the board can file suit asking a judge to force the owner to provide access. Indeed, I suspect there is language to that effect in your legal documents. The real question is "Who pays for the repair?" Again, your bylaws may be helpful. Some require that the limited common element unit owner reimburse the association for any such repair costs. Unfortunately, many legal documents are silent on this issue. And while it is clearly unfair for owners who do not have access to the roof deck to have to pay for any maintenance and repair costs, since it is a common element, all owners may have to share in these expenses. Your state may have some court decisions on this issue, so talk with the association's attorney for specifics. Benny L. Kass is a practicing attorney in Washington, D.C., and Maryland. No legal relationship is created by this column. |
| Buyers master contingent-sale offers By Dian Hymer Most repeat homebuyers don't like selling their current home until they know where they're going. However, most repeat homebuyers can't qualify to buy before selling. So, how do you structure a contingent-sale offer so you get what you want without being homeless? Sellers prefer offers that aren't contingent on the sale of another property. If the buyers' home doesn't sell, they can't buy the sellers' home -- and the sellers are stuck looking for another buyer. As buyers, you should structure your offer so that it is both attractive to the sellers and accomplishes your goals. In some cases, this may mean paying a higher price than you would if your offer wasn't contingent on your home selling. Recently, buyers from San Francisco wanted to buy a house across the bay in Piedmont that had been on the market for several months. They made an offer contingent on the sale of their San Francisco home. The seller accepted but insisted that the buyers pay the list price. The buyers agreed, their home sold, and both transactions closed. Most sellers want a release clause included in a contingent-sale contract. This enables the sellers to continue offering their listing for sale. If they accept a backup offer, they can notify the contingent-sale buyers that they must remove their contingent-sale contingency and provide verification that they can close the transaction without having to sell their home. If the contingent-sale buyers are unwilling or unable to do so, the contract is canceled and the backup buyers move into primary position. You could do a lot of work getting your home on the market and be bumped out of contract on the house you want to buy because you don't have the funds from the sale of your house to close the transaction. There are a couple of ways to avoid this situation. HOUSE HUNTING TIP: Put your home on the market and find a buyer for it before you make an offer on your replacement home. Sellers are more receptive to offers made contingent on the closing of the sale of the buyers' home than they are on offers contingent on the buyers receiving an acceptable offer on their home. If you find a seller that's receptive to an offer contingent on the close, negotiate to keep a release clause out of the contract. If all contingencies have been removed from the contract to sell your home, the seller will be more inclined to agree. When you list your home for sale, it's a good idea to retain the right to rent back at your current home for a while after closing. This could keep you from having to make an interim move to a rental until you find a replacement home. Another option to keep from having to move twice is to negotiate an arrangement where the seller won't invoke a release clause for a certain number of days after acceptance of your offer. Recently, buyers in Oakland, Calif., used this approach. The buyers asked for 30 days from acceptance before the seller could invoke a release clause to give them time to find a buyer for their home. The sellers wanted 14 days. They settled on 21 days. The buyers' home was in contract in nine days. Ideally, once you've found a buyer for your home, the seller should not be able to invoke the release clause. You should be willing to inform the seller immediately if that transaction fails and the sellers should the right to cancel your contract, if they want to. THE CLOSING: Don't be surprised if the sellers want their listing agent to approve your home and list price. The sellers need to know that it's worth the risk to accept your contingent sale offer. Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author. |
| Paying rent during a short sale By Benny Kass DEAR BENNY: I live in a duplex that has recently been listed as a short sale. Since it appears that my landlord has not been making the mortgage payments, what should I do with my rent payments? I have not been contacted by the landlord or the listing agent, so I'm not sure what I should do. Any suggestions? --Chris DEAR CHRIS: I know it is tempting not to pay your monthly rent, but even though your landlord is not paying his mortgage (or at least that is what you suspect), and even though the property is being considered for a short sale, your landlord is still your landlord. You are living in the apartment, and are legally obligated to pay your rent. What the landlord does with your money is his business. More importantly, if the short sale does not happen, and the lender decides to foreclose on the property, there is a new law that can protect you. Congress passed the "Protecting Tenants at Foreclosure Act," which became effective on May 20, 2009. According to the law, a "bona fide" tenant in a foreclosed property has the absolute right to remain in the house for a minimum of 90 days. Note that if your state law provides a longer period of time, state law will apply. But in my opinion, if you are not paying your rent, you may not be considered a "bona fide" tenant and may not be able to take advantage of this new law. DEAR BENNY: We have a rental home and would like to exchange it for a rental home in another part of the state. What length of time does the new house have to be rented before we could move into it? My husband's mother (age 90) who is still living independently in another state will be moving in with us when we make the move. She is getting frailer and needs to move to a place without stairs. I need a knee replacement and also need a house without stairs, and the new property meets our needs. Do these medical problems affect the timing? --Kathy DEAR KATHY: I am afraid that these medical issues are not relevant in an exchange. The current property is called the relinquished property and the new one is called the replacement property. Section 1031 of the Internal Revenue Code allows taxpayers to exchange one investment property for another. If done correctly, any capital gains tax that would normally have been paid when the relinquished house was sold is deferred to a future time. The technical term is that the tax basis of the relinquished property becomes the basis of the replacement property. This is known as a "like-kind" or "Starker" exchange. The rules are quite strict, and must be followed without exception. In your situation, you will have to rent out the replacement house for a minimum of one year, or at least make good-faith efforts to rent it. The Internal Revenue Service generally follows what is called the "old and cold rule." In other words, if at least one year has elapsed from the time you obtained the replacement property, so long as you have followed all of the 1031 requirements, you can move into that property at the end of one complete year. The rules involving Starker exchanges are complex; you must consult with a tax attorney before you go down that path. Benny L. Kass is a practicing attorney in Washington, D.C., and Maryland. No legal relationship is created by this column. |
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