To play it safe, two years. See: 1031 Holding period
@Matthew Otero You must be owner occupied for any of 2 years out of the 5 years. Your best bet is to consult with a CPA and a lawyer to figure out the guidelines that best suit you because again we don't know your position or anything.
If you rehab it to flip, it doesn't matter how long you hold it, it probably won't be a good 1031. You have to buy it with the intention to hold it, or the IRS won't recognize it. The best thing to do is lease it out for a year or two. If it stays vacant and it appears to the IRS that it was intended to be a flip, you'll run into problems. Technically, all of the interpretations of the IRS opinions say 12 months minimum, but I've seen 1031s done after 2 months that were fine. All depends on the evidence of your intent.
@James Thomas Nakashian , that is the current qualification for the primary residence exclusion of sec 121. It lets you take gain tax free not tax deferred. But it is only for your primary residence. Investment property cannot use sec 121. Investment property can only be sold tax deferred through a 1031 exchange. And beware the current tax bill is proposing an extension of the residency requirement from 2/5 to 5/8.
@Matthew Otero , There is no statutory holding period. There is only the qualifier of intent. And as @Jessica Zolotorofe said, if your intent is primarily to flip it then you cannot do a 1031. You must establish the intent to hold for productive use. For years the mantra has been 1 year and 1 day because that always crossed into capital gains treatment, it put the property on two consecutive tax returns, and satisfied some archaic case law language. Most folks still feel comfortable at more than a year. But intent is more accurate and can express itself in holding periods of more than or less than a year.
@Dave Foster I see thank you Dave I appreciate the clarification. Makes much more sense to me now.
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