1031 exchange question ❓

[Jacob Temple]

If you are flipping a house and it doesn't sell right away, so you decide to rent it out. How long does it have to be a rental until you can 1031 exchange it?

[Dave Foster]

@Jacob Temple, You'll want to be sure that you can actually demonstrate your intent changing from flip to rental.  If ever audited you'll want to be able to demonstrate a clear change of intent.  If you put a rentor in but kept the for sale listing active or advertising going that could really work against you.  That type of scenario could (and has) trumped a hold of more than a year.  And you'll of course want to look at what one year means and feels good to you - one year from purchase or one year from putting into service.  Your tax returns will look very different depending on how you position it.  And since no one knows you like your accountant knows you .... get their thoughts.