All Forum Posts by: John Burns

Suppose I own a single-family rental property and the long-term (8 year) tenant vacates.  I want to move into the property to complete extensive repairs/maintenance in anticipation of a sale.  The intent would be to defer capital gains by doing a 1031 exchange.  Would moving into the house (likely six months to do the work) jeopardize eligibility to do a 1031 exchange?    

Thus far, guidance I've found is limited.  Publication 527 speaks to dividing expenses between personal and rental use.  Days in the house substantially spent on repair and maintenance can be excluded as days of personal use in that calculation.  Publication 527 also speaks to whether a dwelling unit is used as a home when determining if net losses are deductible.  Those days of personal use that follow a rental period of 12 or more consecutive months can be excluded from that determination.  However, I don't know if these rules have any bearing on eligibility to do a1031 exchange.

Any help is greatly appreciated!