Capital gains

[Aaron Smith]

BP Tax Gurus,

My question is regarding short term rehabs.  I know that if you hold a property for greater than 1 year, its taxed at a long term capital gains rate (15% for most people), and less than a year, it is short term capital gains, which is taxed much more heavily.

How does this translate to 1031 exchanges.  Is the exchange any different if I have held the property for less than a year?

Thanks, I appreciate your input

[Wayne Brooks]

Rehabs are Not treated as short term cap gains. They are taxed as ordinary income, plus self employment (SS/med).  A 1031 is Not available for a flip, only for  properties held as an investment.  Flip properties are Inventory of your busines, not long term investments.