The 'held for' test
Both the property you sell and the one you buy must be held for investment or productive use in a trade or business. Intent matters: the IRS looks at how you actually used and held the property.
What qualifies
Rentals, commercial buildings, raw land held for appreciation, and other income or investment real estate generally qualify.
What doesn't
Your primary residence, a second home used mainly personally, and property held primarily for resale (fix-and-flip inventory) generally don't qualify.
Frequently asked questions
Does a rental property qualify for a 1031?
Yes, property held for investment or business use qualifies.
Can I 1031 a flip?
Generally no — property held primarily for resale is inventory, not investment property.
Sources
Educational information and estimates only. Not tax advice. Tax rules change and vary by situation; consult a qualified tax professional before acting.