If I were to do a 1031 on and 8-unit and convert and sell as condos, how, or can, I park the money, deferred, somewhere as a lump sum over time and then reinvest?
I really don’t want to pay the gains!
I thought of a TIC tenancy in common, but how hard are they to re-sell when I want my money out? Any experience with these or suggestions would be great.
First you want to acquire an 8-plex in a 1031 exchange. However, your primary intent behind the acquisition is to do a condo conversion then resell the units. Since this is not a qualified investment use for the replacement property, your 1031 exchange will be disqualified and the sale of your relinquished property becomes a taxable event.
The next problem you run into is the condo conversion with an immediate resale. This is a “real estate developer” activity, and the property you subsequently sell does not meet the qualified investment use criteria to participate in a 1031 exchange.
Flip income is ordinary income. If done as a sole proprietor, LLC (disregarded entity) or within an S-Corp, report your income on Schedule C and Schedule SE.