As we start a new year we reflect on time gone by. Here are a series of timely posts regarding timing and properties in a 1031 exchange that will bring you into 2022 with renewed knowledge of key concepts when it really counts!
To learn even more about the different investment directions that you can take, check out the Equity Advantage Video Library and subscribe to the Equity Advantage YouTube channel for more 1031 exchange educational videos.
How Long Must a Property be Held to Qualify for a 1031 Exchange?
Property that is acquired primarily for sale is not eligible for exchange. It seems the distinction between property held primarily for sale and property held for investment is not that great since the purpose of acquiring investment property is almost always to sell it at some point in time, and hopefully for a large profit!
1031 Exchange Myths – The Five Year Hold
If you do a search of the internet for “five year hold and the 1031 exchange”, there are many responses talking about this hold period. The truth is, the five year hold is not a requirement of Section 1031, it’s a requirement to prevent you from triggering gain on the disposition of the property that was acquired.
Read more »
If I Have a Property that I Fixed Up a Year Ago, Am I Able To Do an Exchange on It Now?
The answer really has to do with your intent with the property. In order for it to qualify for an exchange, you must have held the property for investment purposes. Flipper properties do not qualify as investment properties. To determine whether your property may qualify, it is important to examine how long you owned the property before fixing it up, what your intention was when you first acquired the property, whether anyone has lived in the property during this time and what your intention is with the property you wish to buy with the proceeds.
Depending upon your answers to those questions, you may or may not qualify for an exchange. If the answers indicate you held the property for resale, the exchange would not be possible. If, on the other hand, you and your tax counsel can show intent to hold as investment, the exchange is a logical next step.
The Guys With All The Answers…
David and Thomas Moore, the co-founders of Equity Advantage & IRA Advantage
Whether working through a 1031 Exchange with Equity Advantage, acquiring real estate with an IRA through IRA Advantage or listing investment property through our Post 1031 property listing site, we are here to help Investors get where they want to be. Call them today! 503-635-1031.