How Long Do You Have to Hold a 1031 Exchange Property?
There is no hard-and-fast holding period written into the tax code for a 1031 exchange. What matters is that you held the property as a genuine investment. Most advisors point to a safe-harbor practice of holding across two tax years, which shows the IRS you bought the property to invest rather than to flip.
Key points
- The IRS does not set a specific holding period for a 1031 exchange.
- A common safe-harbor guideline is holding the property across two tax years.
- What matters most is showing genuine investment intent, not a magic number.
- Selling too quickly can invite IRS scrutiny.
Learn more
See our full look at the 1031 exchange holding period, or talk it through with a qualified intermediary.
Full transcript
The Internal Revenue Code does not specify a holding period, but there is a safe harbor guideline. According to a lot of financial advisors, if you hold the property for a two-tax-year window, that should avoid IRS scrutiny.