Tax lien --> Foreclosure --> 1031 ?

[George P.]

Good day y'all

Here is the scenario.....

I bought a tax lien in 2011, almost three years later I have obtained the judgement on the property and eventually the deed will be recorded into my name. 

Q: Can I sell this property and 1031 it into a rental in a nicer area? 

My holding periods are as follows: tax lien - appx 3 years, property itself - a few months.

My original intent was to invest in the tax lien and collect interest. I do not want to hold this property. I hope to get rid of this property and avoid paying short-term capital gain by rolling it into a property in a desired area.

Thank you in advance

[Ned Carey]

I agree with @Dave Toelkes Your holding period is only 3 months.  I have already run this scenario by my accountant. Keep in mind much of your costs to acquire the property did not happen until 3 months ago, which works against you as far as justifying the holding time.