Tough choice to make when you're up in years and feel that you've completed enough exchanges and have heard enough of "Swap till you Drop" to last you a lifetime.

Now you are facing recapture of 10-20 years on most units as well as capital gains and you are also looking at the current up market.

Selling and buying (exchange or not) in the same market is next to impossible.

What do you do? Cash out and pay or stay in the 1031 Merry-Go-Round.

Understand that you have two tough choices and it really depends how you make out using a 1031 calculator. I was able to complete only two of four exchanges this past year. That was painful as one of these exchanges were trading three places into one - and the replacement fell through.

It all depends on where you are in life.

You need to discuss with your tax advisor the best way of handling it.

One thing I've done is bulldoze my older units. At that point, there is nothing to recapture since the old unit was fully depreciated and then destroyed. :) Obviously that isn't the right way for everyone, but it worked well for a few of mine that were ready to be bulldozed. THe new construction in its place is a different story. My plan is to rebuild and hold and let my kids deal with them after I'm gone.

You can find exchange or cash out calculators online. If I sell, here's what I have to look forward too:

Long Term Federal Capital gains tax of 20%

California tax of 13.3%

Affordable Care Tax of 2.9%

Recapture on the depreciation of 25%

Sales Commission 6%

Costs-Escrow and transfer tax of 2%

So just about 50% of my proceeds go poof in the night!

But if I do a 1031 exchanged, I pay now only the Sales load and fee's of around 8%.

FWIW I use API Asset Protection Inc for 1031s. $1000 flat fee. Add $250 for multiple properties in the exchange. Easy to deal with.