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Updated about 10 years ago on .
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1031 exchange questions
Hello everyone,
I am considering building a SFR for the purpose of selling for profit. Rather than have to pay taxes on the proceeds, I would much rather roll that money into an apartment, utilizing a 1031 if I can.
Is this something that can be done? I believe that 1031's don't apply to your primary residence and also do not apply to house flipping. Any experienced advice on the subject would be greatly appreciated.
William
Most Popular Reply

You will have to have owned the property for investment for at least two years to qualify for a 1031. A 1031 exchange defers the payment of capital gains taxes. When you flip a house you are essentially a house dealer. The income you earn is treated the same as a car dealer's income. Its not taxed as a capital gain. You're out of luck. Build it and rent it for a couple years and you can complete an exchange.