Vacation Home Exchange

No, this article is not about exchanging homes with other people for vacation purposes, like in the movie "The Holiday". That's for a future blog.

This is about how to claim your vacation home in a 1031 tax exchange.

The IRS allows you to put off paying capital gains tax on the sale of investment properties by exchanging them for properties of equal or more value.

Until recently the rules were a ambiguous in regard to vacation homes. 

Starting in March 2008, an exchange residence used for rental income at least 14 days a year, can be used by the owner for personal use 14 days a year, or 10 percent of the number of days during which it was rented (whichever is highest). Additionally a fair number of occupancy days are permitted for maintenance. The property also has to have been in ownership for at least 24 months prior to the exchange.

Contact me for additional details about this program. 

Sandy Nelson
Realtor for Olympia area real estate
www.sandynelsonrealestate.com