WHAT ABOUT A VACATION HOME?

Revenue Procedure 2008-16 creates "Safe Harbors" for exchanges of vacation homes, however,the rules are very specific.

Certain dwelling units will be considered for investment purposes if the following criteria are met:

Both the relinquished and replacement properties are owned by the taxpayer for at least twenty-four (24) months and within each twelve (12) month period making up the twenty-four months the taxpayer must:

Rent the property to another person at fair market rent for fourteen (14) or more days. (Family members qualify if they pay fair market rent.)
AND
The taxpayer's personal use cannot exceed the greater of fourteen (14) days or ten percent (10%) of the time rented in sentence above.

 

WHY DO I NEED A QUALIFIED INTERMEDIARY (QI)? >>

NOTE: The content of this website is informational only. It does not constitute tax, legal or accounting advice. Each situation is different and you are advised to seek appropriate professional advice to see if a 1031 Exchange meets your needs.