The issue of selling a vacation property, or even a second home for that matter, and 1031 exchanging it for rental (investment) property is one that I receive questions on all the time.
The fundamental issue is whether the property is truly held as rental (investment) property or whether it is just a vacation property or second home. It is not an easy question to answer because in most cases the answer is a blend of the two scenarios; it's part vacation and part "investment."
You need to gather all of the facts involved in your specific situation and sit down with a 1031 exchange expert to determine whether your fact pattern may qualify for 1031 exchange treatment.
You can learn more about this subject at http://www.exeterco.com/article_vacation_property.aspx which discusses the technical issues in much great detail.
Friday, November 03, 2006
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