Selling a house that was going to be a BRRRR

[Jacob Daniels]

Hello all!

We recently purchased a property with the intention of holding it as a rental. Property went under reno for 4 months and fully updated everything. Its been sitting on the market as a rental for about 2 months, with price decreases every 2 weeks or so, however no one is biting at it. At this point, im considering just selling it. Can i use a 1031 exchange if i only held the property for 6-7 months, since my original intention was to make it a rental?

[Whitney Nash]

Hello @Jacob Daniels

Since your intention was to rent it out and you have proof that you have been trying to rent it, you should be able to do a 1031 exchange. You would still want to make sure that it makes sense to do so regarding your adjusted basis, taxable gain, etc., though. Be sure to save the documentation for everything that shows (substantiates) your intent and efforts to rent it just in case you do a 1031 and are ever audited.