An IRS auditor construes your client's ownership of an exchange property of less than a year to be the actions of a real estate dealer. What would most likely happen in this instance?

Unset starred question

Any gain could be ordinary income and not subject to $1031$ rules.

Any gain would be subject to $1031$ rules.

Any loss could be ordinary income and not subject to $1031$ rules.

The transaction would be cancelled.