What properties qualify for a 1031 exchange?
If your property is not your primary residence and you've held it for investment purposes, trade, or business, your property is eligible for a 1031 exchange.
Properties that do not qualify include, but are not limited to, the following:
- Personal residences,
- Fix-and-flip properties,
- Vacation, or second homes that aren't held as rentals,
- Land in development, or
- Property purchased for resale.
To qualify, the transaction must take the form of an “exchange” of both properties involved.
In addition to the type of property, there are limitations on what you can expect to receive from the exchange. Stocks, bonds, or beneficial interests in a partnership are not eligible for a 1031 exchange. Only “like-kind” property can be considered for exchange purposes.