Posted by JHyre in Ohio on January 04, 2003 at 08:39:22:
The IRS and the courts operate on different standards. Assuming that you can prove investment (as opposed to “flip”) intent, the IRS wants to see a holding period of one year +, while the courts are much more lenient…there have been cases where they’ve required mere days of “holding”. If you have the “investment intent”, I’d go ahead with the 1031, understanding that the IRS will contest it if an audit occurs.
John Hyre
1031 - exchange time period. - Posted by Steve
Posted by Steve on January 03, 2003 at 18:13:20:
My background is buying and holding single family rental homes part time. I have never flipped a property before or purchased land.
I put a lake lot under contract 9/2002 that I intended to build a vacation home on. Right after I put the lot under contract I found a lake house and purchased that. Since the lot was such a great deal I went through with the closing. I put the lot on the market and immediately got a contract on it. We are suppose to close this month at about double what I paid for it.
I have read and talked to a number of people about a 1031-exchange. Most say that i’m in a gray area since I have only owned the lot for 3 1/2 months.
It is my understanding that the IRS has nothing in it about a holding period, but for some reason most say I should hold the investment for a year or two. Is there any history of IRS actions on time period?
I am currently looking for a rental home to do a 1031 on.
Any more insight as to whether I would qualify for the 1031 or what the IRS would condsider the bottom line in my case would be greatly appreciated.
thanks
Steve