1031 Exchange Holding Period

[Wendy Lavana]

Can anyone tell me what happens if I have to sell a property I purchased from a 1031 exchange before the 2 year holding period?

[Bernard Reisz]

@Wendy Lavana You've gotten great info already from @Dave Foster and based on the scenario you've outlined -  in which you purchased the 1031 replacement property with the intent to hold it for investment purpose but subsequent events required a change in plan - it should not disqualify your prior 1031. However, neither the IRS nor the courts can read your mind so you want to be positioned to demonstrate that when you initially purchased the property it was not for resale purposes.