1031 exchange rules

[Matt Geiger]

I bought a second property with a conventional loan and I have spent the last year rehabbing it.  I have never rented it out and plan on flipping it.  Would I be able to do 1031 exchange on this property since it was never a rental and I've only owned it 14 months?

[Bill B.]

No. Not because of the length of ownership. But because not only was it not a rental, you never intended to rent it. Either change your mind and rent it out for a year or two and then do an exchange. Or Pay the taxes and move on to your next flip. Flippers pay the highest taxes imaginable because it’s regular income. Although your slowness might less you slide in to capital gains territory and it’s lower rate. Make sure you talk to a tax professional.