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Updated over 4 years ago, 07/14/2020
Does a rental have to be occupied for a 1031 exchange
I lived in the house bought as a primary residence for 1.5 years. Rented it out for 4 or so years after. Moved back in for 2 years with the intent to rent it back out after I moved back out again (moved back in after I sold my other house I was living in). It's been listed for 2 months and all I get are around 500 credit score applicants now. Wasn't like that before. Never had any vacancies even in winter.
So I'm wondering if it just being listed as a rental the last two months combined with it being a rental previously qualifies it as a rental for 1031 exchange or not.
Check with a 1031 company. Look Up Bill Exeter or Dave Foster on here.
- Joel Owens
- Podcast Guest on Show #47
#1 1031 Exchanges Contributor
- Qualified Intermediary for 1031 Exchanges
- St. Petersburg, FL
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#1 1031 Exchanges Contributor
- Qualified Intermediary for 1031 Exchanges
- St. Petersburg, FL
@Joel Owens, thanks for the shout out. @Jack B. it really depends on how it is being used now as well as your intent. If you're living in it and trying to rent it before you move out it would be hard to argue that it is an investment property - especially because it is probably not being treated as an investment property on your tax return.
But if you moved out and converted it to investment and have tried to rent it and your intent was to hold then it could conceivably be considered being held for investment. I'd say the length of time plus the surrounding circumstances make it shakey. But each situation is different.
- Dave Foster
Originally posted by @Dave Foster:
@Joel Owens, thanks for the shout out. @Jack B. it really depends on how it is being used now as well as your intent. If you're living in it and trying to rent it before you move out it would be hard to argue that it is an investment property - especially because it is probably not being treated as an investment property on your tax return.
But if you moved out and converted it to investment and have tried to rent it and your intent was to hold then it could conceivably be considered being held for investment. I'd say the length of time plus the surrounding circumstances make it shakey. But each situation is different.
How would it be shaky? I've rented it out before. When I moved back into it 2 years ago, I intended to only live there until I found another primary residence to buy and move into. I did that. I've had it listed for 2 months with nothing but 550 credit score people applying. First time ever at this house that this has happened. I suspect the crap tenants are the only ones moving around right now, after landlords still kicked them out despite moratoriums or for other reasons.
My intent is clearly to rent it out and I've taken active steps to do so, listed, it, responded to nearly a hundred inquiries, provided tours. Not one of the applicants meets the published criteria in the listing. Does that not show intent to treat it as an investment property?
Bump