1031 exchange q?

[speedoflight]

i'd like to sell my 2nd home (rental) for which i've owned for 10 yrs. problem is i'll get hit with capital gains pretty hard. i'd like to do a 1031 exchange for another home that will be of more value than my rental home. declare it as a rental for some period (maybe a year) then eventually move in it. basically, i'm planning to move out of my primary home and buy a bigger property in which i'm doing a 1031 exchange from my 2nd home. (you follow? :)) is this legally possible and will i be taxed later if i do decide the sell the new 1031 exchanged home even though it became my primary residence? all properties are in california.

some adivsed me to just sell my existing home and move back to my 2nd home and live there for 2 years. i don't really want to do that 'cos it's a smaller home and there aren't good schools around for my kids. plus i've only live a little over a year in my current primary home.

appreciate your input. thanks.

[Greg]

You are on the right track but you need to talk to an expert in this field. I use this company. They are on the ball. http://1031.us/Home/

[speedoflight]

thanks for the link. from reading their tax break writeup, it looks like it's doable! definetly will consult with a pro. much appreciated.

[wexeter]

Your strategy may be affected by The Housing and Economic Recovery Act of 2008. It has certain provisions incorporated within it that amends Section 121 of the Internal Revenue Code. I'm not sure what your final strategy ended up to be. Can you give us an outline of what you ended up doing and I'll let you know if the change affects you? You can also search for Changes to Section 121 to see what has changed.