Can I 1031 taxes from the sale of an purchase agreement

[Account Closed]

I plan to flip a multifamily property I have under contract (have a buyer for it already). The plan is to do a dual closing. 

I'm looking to limit my tax exposure. 

I plan to purchase another property to hold in the near future. Can I 1031 this MF that I never really "own"? 

Is there another strategy I could look at?

[Dave Foster]

@Ashish Acharya. Watch this - I'm about to send @Ashish Acharya and @Wayne Brooks spinning around the room :)

There actually is a legal concept related to contracts and 1031 where a contract to purchase property that has been in existence for more than a year might be deemed to be the same bundle rights that are afforded fee simply ownership of property.  In other words if you've been in contract for more than a year you may be able to treat that contract as if you owned the property yourself.  

We saw this a bunch 2002 - 2006 when folks would go into contract on units of high rise buildings that would not be done for 24 months.  One year into owning the contract the sales price for units had doubled.  So our clients would "sell" their contracts to other retail customers.  In essence they were selling real estate that just hadn't been produced yet.  They would then 1031 into another asset.

Haven't seen much of that in a few years but it might be worth looking into if you'd owned the contract for more than a year.