Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 54%
$32.50 /mo
$390 billed annualy
MONTHLY
$69 /mo
billed monthly
7 day free trial. Cancel anytime
Tax, SDIRAs & Cost Segregation
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated almost 7 years ago on . Most recent reply presented by

User Stats

45
Posts
5
Votes
Adam Sporinsky
  • Investor
  • Chicago, IL
5
Votes |
45
Posts

Minimum time to AirBnb/Short term lease before 1031 on sale?

Adam Sporinsky
  • Investor
  • Chicago, IL
Posted

I was looking at a deal recently that was for multiple properties at once and one would have included something that turns into a flip.

The property was also in a fantastic area for Air BnB so the plan was to actually air BnB as is for a while, then do the work for the flip and sell it.  I was trying to determine how long I would need to use it as an air BNB before I could potentially 1031 the sale of the building.  I wasn't able to find anything on this though.

Does anyone know what is required, or have a general rule?  It seems like there could be potential to use this kind of temporary rental structure to make things like a slow moving flip be 1031 eligible, potentially saving a lot of money over time.

Most Popular Reply

User Stats

9,045
Posts
9,406
Votes
Dave Foster
#1 1031 Exchanges Contributor
  • Qualified Intermediary for 1031 Exchanges
  • St. Petersburg, FL
9,406
Votes |
9,045
Posts
Dave Foster
#1 1031 Exchanges Contributor
  • Qualified Intermediary for 1031 Exchanges
  • St. Petersburg, FL
Replied

@Adam Sporinsky, You need to eliminate the word "flip" from your vocabulary entirely :)

Your intent with a flip is primarily to resell.  1031 qualifying real estate is purchased with the intent to hold for productive use in trade business or for investment.  There is no statutory holding period.  But of course the longer the better usually.

Most folks feel that anything over a year is pretty good to get the property on two consecutive tax returns.  But there could always be mitigating factors that would allow for a shorter or longer period to demonstrate your intent. 

  • Dave Foster
business profile image
The 1031 Investor
5.0 stars
96 Reviews

Loading replies...