Vacation Homes and §1031 Exchanges

By
Services for Real Estate Pros with Malbur Exchange Group & Assoc.

The U.S. Tax Court just issued a ruling regarding like-kind exchanges and "vacation" homes.  In a Tax Court memo issued Wednesday (May 30, 2007); a Georgia couple had their vacation / second home exchanges overturned.  If you have a client that is considering a §1031 Exchange, be sure to recommend that they not only talk to an experienced Qualified Intermediary but to an experienced CPA.

Like-Kind Exchanges are possible with so called vacation / second homes, but only in limited circumstances set forth by the Internal Revenue Service.

 

 

 

 

Comments (3)

Bill Exeter
Exeter 1031 Exchange Services, LLC - San Diego, CA
1031 Tax-Deferred Exchange Expert

Steve,

Great post. 

We have always taken this position even when it was not a popular position.  Property held for personal use like vacation property will not qualify for 1031 exchange treatment.  You can stop using it personally, begin renting it out for 12 to 18 months or more, and then sell and complete a 1031 exchange. 

It just takes some proactive planning.

 

Dec 07, 2007 12:13 PM
Steve Chacon
Malbur Exchange Group & Assoc. - Denver, CO

William,

 

Thanks for the kudos and I agree with your reply.  Keep getting the good information out there!

 

 

Dec 11, 2007 05:11 AM
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

  We invite you back to ActiveRain in 2017. 

  We would welcome your return!

Sep 15, 2017 06:22 PM