Investment
property is a very broad
category. In fact, it generally
includes any real property that
is not your personal residence.
Examples
of investment property include
rental houses and condominiums,
bare land, commercial office or
warehouse space, apartments and
farm land.
When evaluating
1031 exchanges, the IRS
will most often look to the exchanger's
intent for owning the property.
Two common ways to establish investment
intent are to establish rental
income for the property or to
establish a strong case for holding
the property for a time while
it appreciates in value.
In IRC
Section 1031, the IRS
also outlines that property held
for productive use in a trade
or business qualifies for 1031
exchanges. For example, the land
and building for a restaurant
are held for business use or land
used by a rancher for grazing
cattle.
