does holding time transfer during 1031 Exchange?

[Ari Newman]

I'm trying to determine how holding time can affect tax implications in the following scenario.

I purchased a piece of land 10 years ago for $20K and held it for investment purposes.  The land is now worth $100K.

I find an undervalued home that I can purchase for $200K but fixed up will sell for $400K.

I purchase the house by selling the land for $100K; the proceeds go to my QI.  I add $100K cash to this and my QI purchases the new house for $200K.

Ignoring depreciation for this exercise, we can say that my basis in the new house is $120K. (basis of the relinquished land + cash added)

I spend $5K fixing up the house and 2 weeks later sell it for $400K.  Ignoring depreciation recapture and transaction costs, I'm looking at a gain of $280K. 

So the question is, would this be taxed at Long Term Cap gain rates?  Did my holding period in the land (10 years) transfer over to the new property with my basis?

Ari