Lake cabins used only for personal use-welcome to Minnesota-is there any provision 1031 or otherwise to get a tax free exchange. Remember-personal use of existing and personal use of next... Thank you
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Unfortunately no. Property held for personal use is not eligible for a like-kind exchange.Originally posted by JON
I want to ask about other preparer's experiences. I've had several people the past few months ask me this question. The trail always seems to lead back to something somebody heard some guy on the radio say about a way of doing a 1031 exchange for a second personal-use home. Has anybody heard this or know what they're saying? -
Vacation Homes and 1031
Here are some links that might give some insight about 1031 exchange for cabins,vacation homes and 2nd homes.
also http://www.1031cpas.com/vacation_homes.htm
SandyComment
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1031 exchange
Is reserved for investment properties (rentals) and involves a third party with deadlines to do certain things. I would say that (offhand) that you could not get a deferment unless it was first converted to a rental.Comment
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Thank you...
I think what we are running up against are real estate agents who do not have any idea, but know they can get 2 commisions instead of one. Again this week I had client call from his Wisconsi cabin(really a very nice house) with the same question-agent and friends are telling him to exhange for a bigger nicer and do it tax free. I said we had already gone through this and if these tax experts can give him precise taxing authority information that proves me wrong I will stand corrected. He said it was the same agent and he was not able to anything in writing.
My guy will probably sell his city home first-live in cabin for two years and sell.
S T I have 1031 saved on my favorite places. I still think the vacation home 1031 has some holes. What if 2 out of the last 4 years you used it more than the 15days/10%-I have not had this situation yet, but I am sure it is coming. Here I am still telling people to sell Minnesota personal residence first-occupy Fla for the two years sell that for the move up. The fast price increases in FLA could cost money for waiting..
Attorney in a small mid nothern city(whitefish chain) offerred to write a client an opinion saying his cabin could quailify for 1031 exchange. I tolf him I could not do the return, but make sure the attorney added the guarantee to cover any adverse taxes, penalties and interest if the 1031 did not work.
The tax stories around cabins have gotten even bigger than the walleye fishing stories.Comment
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