If I have a condo rental with an average rental period of less than 7 days (active), can I 1031 this into a long term rental (passive) when I sell the condo?
Yes, as long as you have held the property as rental property and have the intent to hold the acquired property as rental property it will qualify for 1031 exchange treatment.
The best way to demonstrate your intent to hold the property for investment is to do just that - hold it. I would recommend holding property for at least 12 months in order to demonstrate your intent to hold for investment.
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Property acquired in a 1031 exchange must be held for a qualified investment purpose for some period of time to validate the exchange. Most exchange gurus suggest a one year holding period before converting the exchange property to personal use. If your sister has held the property for a year, she can convert the property to personal use without fear of unwinding the exchange.
If she then builds a house on the property and occupies it as her primary residence, she becomes eligible for the capital gains exclusion on the sale of a primary residence after five years of ownership AND at least two years of occupancy in the five years prior to the sale.[ Edited by NewKidInTown3 on Date 03/30/2006 ]
Yes, as long as they have held the property they acquired long enough to qualify as investment property (I would recommende at least 12 months), they can convert it to their primary residence. It is important that they hold it, treat it, use it and account for it as investment property during the investment period.
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Yes, property used in a trade or business can still participate in a 1031 exchange.
Yes, as long as you have held the property as rental property and have the intent to hold the acquired property as rental property it will qualify for 1031 exchange treatment.
The best way to demonstrate your intent to hold the property for investment is to do just that - hold it. I would recommend holding property for at least 12 months in order to demonstrate your intent to hold for investment.
[addsig]
Property acquired in a 1031 exchange must be held for a qualified investment purpose for some period of time to validate the exchange. Most exchange gurus suggest a one year holding period before converting the exchange property to personal use. If your sister has held the property for a year, she can convert the property to personal use without fear of unwinding the exchange.
If she then builds a house on the property and occupies it as her primary residence, she becomes eligible for the capital gains exclusion on the sale of a primary residence after five years of ownership AND at least two years of occupancy in the five years prior to the sale.[ Edited by NewKidInTown3 on Date 03/30/2006 ]
Yes, as long as they have held the property they acquired long enough to qualify as investment property (I would recommende at least 12 months), they can convert it to their primary residence. It is important that they hold it, treat it, use it and account for it as investment property during the investment period.
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