Q: A small commercial building in CA is in a family trust. Can that be traded for rental homes?
In other words, the building is removed from the trust and traded for a rental house that is then placed in the trust in place of the bldg.
A: I believe you want to do a 1031 exchange of property. [That's Internal Revenue Code Section 1031.] If that is accurate, whether the property is inside or outside a trust will not matter. Speak with your investment advisor, financial planner or CPA to determine if your properties qualify for that tax benefit. If you want a high-level explanation of 1031 exchanges, here is one I found: www.investopedia.com/financial-edge/0110/10-things-to-know-about-1031-exchanges.aspx Best wishes.
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