Investor vs Dealer - 1031 Exchange

[Michael Power]

Growing our RE business in the US certainly has its growing pains. In structuring our entities, (we function in Florida, Georgia and soon in Texas), we have been informed that, "...your company is a dealer in real estate sales and purchases, not an investor (1031 exchange tax deferral is not allowed for dealers)".

A more detailed discussion will take place with our CPA, but I would like to hear from some others on BP who "deal" in rehabs within an LLC, s-corp or c-corp.

How are your 1031 exchanges handled? Is this an entity focused restriction, or an activity focused restriction? I see the reasoning on an individual basis, but how many flips does it take before you are considered a dealer?

Mike P.