1031 On A Development Project?
I am thinking of investing in a development project that is estimated to take over 2 years. I will be a silent investor getting a cut of profits on the end sale of the residential development deal. I have read on various websites that you are not eligible for a 1031 if you are a developer planning to sell quickly. Does anyone have any information on this?
What you read is correct
Interesting question. We are developers and can say without a doubt you cannot 1031 a development as "it is in a primary line of business." However, as a "silent investor" it might be worth a look into. Most likely no, but maybe if the deal can be structured (ie through guaranteed vs. unguaranteed returns) as to allow an exchange for you the "investor".