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Daily Archives: October 10, 2017

Yes, You Can Use a 1031 Exchange for a Vacation Home

For many individuals, the sale and replacement of a second home will incur capital gains taxes. The good news is that, if appropriate rules are followed, these homeowners can benefit from the tax-deferral benefit of a 1031 exchange. The rules governing such transactions are explained in Revenue Procedure 2008-16. Here the IRS offers clarification to a previously confusing section of 1031 code. As of March 10, 2008, vacation home exchanges will qualify if all of the following are met: Relinquished Property The owner must have held the vacation home for at least 24 months prior to the exchange. For each 12-month period preceding the exchange, the vacation home must have […]