Borden: Refuting The Notion Of A General Holding Period Requirement For Section 1031

Bradley T. Borden (Brooklyn; Google Scholar), Refuting the Notion of a General Holding Period Requirement for Section 1031, 39 Prac. Real Est. Law. 21 (2023):

This article revisits the widely misunderstood issue of whether section 1031 imposes a holding period requirement on property received in a section 1031 exchange or property transferred as part of a section 1031 exchange. The article presents a hypothetical discussion between a property owner and tax advisor to show that the section 1031 qualified-use requirement does not impose a holding period requirement. Suggestions by tax advisors to the contrary appear to be based solely on perceptions of the likelihood of audit or the issue being raised on audit, which factors are prohibited in giving tax advice. 

Thus, the article recommends that tax advisors carefully consider existing law when providing advice to property owners who are considering transactions proximate to section 1031 exchanges.