Can the taxpayer use the Section 1031 exchange replacment property as a primary residence?
No, not initially as the 1031 exchange process is not for this purpose as the taxpayer is only permitted to use the property 14 days out of the year. Yes, at a later point if the taxpayer purchases property in an exchange and then after one year changes their mind and converts this property to their primary residence it is allowable. However, it will be necessary for the taxpayer to live in the property for two of five years to exclude capital gains on a primary residence exclusion rule.
Related Questions
- Is it possible to convert an investment property into a primary residence and eventually sell the property applying Section 121?
- Can the replacement property eventually be converted to the taxpayer’s primary residence or a vacation home?
- Can the taxpayer use the Section 1031 exchange replacment property as a primary residence?
