When Does Rental-Property Qualify For An Exchange?
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Put simply, if a property is rental property this year only, will the 1031 apply?
A: One typical safe answer is the "longer the better". However, that is not much help.
Another answer is that the taxpayer must have actually intended to hold the relinquished property for investment/business purposes (when it was was disposed of) in order to qualify.
Many tax professionals think that a year of qualified use for investment/business purposes is sufficient. I have always felt better with two years because of an old PLR that said two years was sufficient.
About the Author:
Jeff Peterson (AKA: "Professor 1031") is a Qualified Intermediary and Serves as an Adjunct-Professor for the William Mitchell College of Law (Where He Teaches About Federal Income Tax). Jeff Works With People From All Over the USA to Save Money on Federal Capital Gains Taxes.
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