Earliest time I can do 1031?

[Jason Sung]

Hi all, 

I have a rental property that I bought in Feb 2024. After rehab, I have been renting it since May 2024. Hence, no tax filing was done for rental income from this property yet. When would be the earliest time I can sell it as 1031?

[Dave Foster]

@Jason Sung There is actually no statutory holding period. The gold standard is what your intent was for the property, and how you can demonstrate that intent if ever questioned. Like @Michael Quarles and @Kristin Flores-Brockman are saying here.

Occasionally there are investors who acquired an investment property with the intent to hold and put renters in, but find some unexpected negative catalysts that will impact their ability to rent it out. Or they were randomly approached with an offer that was too good to refuse (an unsolicited offer is gold!!), despite their intent to hold onto the property.

It shouldn't be a recurring scenario (or it looks a little less "accidental") but in cases like this, your job is to simply have the correct intent, see what you have done to demonstrate that and build your case. Don't ever do something you know is wrong simply because you may not get caught. But also, never not do something that is right simply because you might be questioned.