Hi Mathew, thanks for asking about in effect the tax treatment of non refundable option payments, rent credit etc!!

I dont do any besides a visual walkthrough.

If you had the intent to hold for investment and were waiting for capital appreciation, then it would certainly qualify for 1031 Exchange treatment.

Read more on the biggest takers of public money during the Fed bailout here: http://www.bloomberg.com/data-visualization/federal-reserve-emergency-lending/Bank of America whistleblowers cited examples of how Bank of America employees were administratively giving the run around to borrowers seeking loan modifications or due process on their foreclosure process.

Its a personal favorite visual.

If so, then they qualify for tax-deferred exchange treatment under Section 1031.

Phil Z Fix and Flips do not qualify for 1031 Exchange treatment.

Rehabs/Flips do not qualify for 1031 Exchange treatment because you did not have the intent to hold for rental or investment, but rather had the intent to fix and flip (i.e. held for sale, not investment).

You must sell and buy "Qualified Use" property in order to qualify for 1031 Exchange Treatment.

Each strategy gets 2 short pages of treatment.