1031 Alternatives for back to back escrow deal

[Noa Zell]

Are there any good alternatives to a 1031 exchange for a back to back escrow deal, since the property in question will never be under my name? I have an option to purchase at an attractive price but would rather not bring cash to the transaction. I am looking to secure a buyer and close with both parties in escrow. How can I avoid capital gains tax if at all?

Any first-hand information on DSTs of 731s would be helpful, or any other creative ideas that could make this deal profitable.

[Bill B.]

Nope. You aren’t going to convince the irs you bought a property as an investment if you sell it the same week. They’re going to call you a “dealer” and count your real estate as inventory. You’re going to face the maximum taxes possible. State and federal and maybe self employment. 

You alternatives are hold for a year to only pay capital gains tax. Move in to it and fix it up and stay there for 2 years to be tax exempt. Anything less than a year is penalized. 

Ps. Ignore the move in I see your second post saying commercial. So hold for a year and fix it up would get you down to just capital gains tax.