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1031 Exchanges

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Christopher Mendoza
  • Real Estate Investor
  • Tampa, FL
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Rental Property Rehabbed to Sell -- 1031 Exchange Implications

Christopher Mendoza
  • Real Estate Investor
  • Tampa, FL
Posted Jul 21 2014, 14:39

Hi BP Community. What are the implications for a 1031 Exchange if a long-term rental property is rehabbed prior to sale?  For example, the homeowner improves the interior of the house (vacant with no tenants) in order to get a better offer and return on investment. 

Is it a sliding scale (e.g., a certain amount of work will convert the rental into a flip)? If there is a sliding scale, where is that delineating line between rental (with 1031 benefits) and flip (loss of 1031 benefits)? 

Any and all answers or thoughts are appreciated. Thanks in advance. 

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