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1031 for Partially Renovated Property
Hello, I purchased a distressed house with the intention of fixing it up. I've received some good offers on it before it's finished and am planning on selling. I purchased it in November of 2020. If I sell in January of 2021, would this be a candidate for a 1031 exchange?
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- Qualified Intermediary for 1031 Exchanges
- St. Petersburg, FL
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@Andrew Merritt it really comes down to what your intent is and how you can demonstrate it. The optics are in your favor since you'd have ownership across two tax years. But optics aren't a reason by themselves to do it. It's really about how you can demonstrate your intent - What's your normal business practice? Are these offers unsolicited?. Did you have it on the market to rent or was it listed for sale?
If your intent was to fix and sell it doesn't qualify. If your intent was to hold then it qualifies.
- Dave Foster
