1031 Exchange Holding Period Requirement
The IRS hasn't provided regulations on how long property must be held to qualify for 1031 exchange treatment. However, the IRS does look at how long the Taxpayer held the relinquished property prior to the exchange, as well as how long the replacement property was held after the exchange.
The IRS often takes the position that property owned for less than two years was not held by the Taxpayer within the meaning of § 1031. Most experts feel that a one year holding period is sufficient. The length of the holding period is a key element in determining the Taxpayer's intent. If the property is held for a relatively short period of time, there may be an inference that the property was held for sale, rather than for investment. Property held for sale does not qualify for non-recognition treatment under § 1031.
For more detailed information on holding period requirements, please see article below.