1031 time requirements
I completed a 1031 exchange for an investment property 2 years ago. The received property is a residential home that I have used as a rental. Now I would like to use this property as my personal residence. Have I held the property as an investment property and as a qualified 1031 exchange long enough to now use it as a personal residence without jeopardizing the original 1031 exchange?
I plan on living in this home for 2 - 3 years and then selling it. Will all of the gains be tax free as I will have used the home as my primary residence for at least 3 out of the last 5 years?
From the information you have given, it appears that you have used your replacement property long enough that a conversion to your primary residence will not undo your exchange.
When you eventually sell this property (as your primary residence), you will still have depreciation recapture to contend with. This probably will not have a significant effect upon your tax liability if investment use of your primary residence was only 2 years.