Your own treatment of expenditures and loan interest paid and depreciation of the asset are for your tax advisers to address. kv

Rental income is not a requirement for 1031 treatment.  

In the process, I learned a little bit about building codes, dealing with city planning department, inspectors, hiring help and sub-contractors, and obviously learn a lot about the various aspects of single family home remodel and construction.I did my undergraduate studies in Architecture but never pursued that career path but instead decided to record music and ended up building home recording studios and learning a lot about sound-proofing, acoustical treatments, and other helpful but niche/technical things that end up quite applicable in improving real estate properties that are near loud things like freeways, train tracks, and airports.Around 2008, I purchased a single family home in San Mateo 1/2 inherited, I bought out the other half from an overseas relative.  

The revenue procedure provides six examples that include illustrations of the treatment of depreciation and boot in which both the benefit of §121 exclusion and §1031 deferral could be used.

The tax treatment is usually different for a business or personal expenses.Go through all through the typical evaluation and due diligence requirements including a professional inspection and appraisal.  

@Jason Bajaj, Based on your description of ownership length and use the property certainly qualifies for 1031 treatment. 

And 1031 treatment is not allowed on your primary residence. 

or do you wait until after the 6 month waiting period to get a judgement from the ejectment suit and then have free will to make improvements... whether they are physical or simply paying weed liens, or termite treatments? 

Same treatment for buyers who want to only offer 60% on everything.

Therefore, they may be willing to pay $20,000 more for a home than i would, not knowing that the property needs a waterproofing system and mold treatment, or has an underground oil tank, or has termite damage, or ignores the 25 year old roof, water heater, and furnace.