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How long should you hold a 1031 exchange property?

There’s no required holding period specified in tax law, but most experts suggest holding a 1031 exchange property for at least two years. If you sell quickly, and the IRS concludes your purchasing intent was a quick profit instead of investment, they could invalidate your exchange. Can you live in a 1031 exchange property?

What is a 1031 exchange?

A 1031 exchange, also known as a like-kind exchange, is a powerful tax-deferment strategy popular with experienced real estate investors. It allows you to defer capital gains taxes on an investment property when it’s sold—as long as the investor purchases another like-kind property with the proceeds of the first property sale.

How long does a 1031 exchange take?

This is the first significant timeline in a 1031 exchange. Within 45 days of selling the relinquished property, you must identify potential replacement properties.

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