I recently sold my rental property (owned for 5yrs, rented out for the last 3.5yrs) and netted $50k. I am currently under contract to purchase a new house for $55k down that I plan on living in. The seller is having a hard time finding a new residence and is asking for another month. This is fine with us as we are currently renting on a month to month basis.
I know that as it currently stands, I am set to pay capital gains tax on the $50k, which sucks. I am considering purchasing the house we have a contract on as an investment property and have the seller "rent" it for the next month. Will this let me file a Section 1031 exchange?