Purchased a 1031 exchange property September 2020 just as California gov (and now the Fed Gov) extended the Pandemic eviction moratorium. Relinquished property was a successful commercial rental for over ten years and exchange property is a residential property which I hope to eventually move into as my primary residence but I understand must act as an investment for a minimum of 2 years before I move into it. After doing some repairs and deferred maintenance the exchange property is rental ready but obviously this moratorium has made me hesitant to rent it out.
My tax planner says I really need to get it rented or risk the IRS voiding the exchange. I understand this but once moved in a tenant can declare that they are adversely affected by Covid and only have to pay 25% of the rent and I cannot evict for non-payment. Which to me is exactly the opposite of an investment.
I entered into the 1031 exchange program with intention of renting out the property but now I am scared it will can turn into a huge fiasco. Anyone have any experience or thoughts regarding this issue?
