1031 to buy foreign property?

[boxers]

has anyone had any experience using this method?

can I sell one of my rentals in the States and roll it into a CR property via a 1031 exchange?

[Russ]

I checked the IRS site to confirm what a 1031 exchange is:

http://www.irs.gov/businesses/small/industries/article/0,,id=98491,00.html

They say no, it doesn't (my italics)

Like-Kind Property

Properties are of like-kind, if they are of the same nature or character, even if they differ in grade or quality. Personal properties of a like class are like-kind properties. However, livestock of different sexes are not like-kind properties. Also, personal property used predominantly in the United States and personal property used predominantly outside the United States are not like-kind properties.

Real properties generally are of like-kind, regardless of whether the properties are improved or unimproved. However, real property in the United States and real property outside the United States are not like-kind properties.

However, in general your assets overseas are treated the same way as assets in the US. You are taxed on your worldwide income, so your rental property could be in Costa Rica and you would have all of the normal tax breaks as on a rental property in the US. By the same token, you could do a 1031 exchange if both properties were in Costa Rica or evidently in Costa Rica and another country.