This means the funds will be protected from the taxman, and can be easily allocated to a purchase of a new home. You have 45 days to find the right property and six months for the transaction to be completed. To make this transaction go smoothly, you should search for your next home before you rent your existing rental property. This process can be further explained in Section 1031 (Internal Revenue Code).
Capital gains taxes are the amount you pay on the gain from the property sale. This tax will rise if you claim depreciation against the property.
The property owner must follow these rules. The exemption from 1031 capital gains tax will be null if the property owner fails to comply. Tax will still have to be paid in the following year. The 1031 exemption is not available to a primary residence. You must establish a primary residence in the new property to be exempted from the 1031 tax.
You can also negotiate to sell any existing furniture to the buyer as part the property sale. The new owner can use the same photos and setup as you did when listing the property on Airbnb. Some buyers might want to make things more in line with their vision. Others would appreciate the savings on starting costs.
Hire an Airbnb agent who specializes in selling Airbnb properties. This will allow you to understand the intricacies of selling your property. Buyers who are hesitant about buying an Airbnb property can get help from professionals.
A vacation rental property brings an extra layer of complexity to the selling process. This does not mean that the sale has to be difficult. If you contact the people in charge of your vacation rental business prior and during your listing, you can ensure a smoother process.
Buyers aren't interested in dealing with complicated transactions, especially if they are looking to invest. We mean to avoid making the sale of a vacation rental too complicated. Don't, for example, try to get free or discounted vacation time in the future. Although it may seem small, buyers will be suspicious of sellers who include too many terms and conditions in the contract.
