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August 2013

Vacation Homes and 1031 Exchanges

By Cris Anderson

August 2013

Real estate in resort or vacation destinations can produce diverse and significant tax consequences. These tax consequences can be particularly critical at the time a property is sold, since many vacation destinations have appreciated significantly and property owners may be facing significant capital gain tax consequences upon disposition. The use of a tax deferred exchange under IRC Section 1031 can be particularly important in disposing of such property.

This article is dedicated to our new Vacation Home Handbook, which addresses the use of Section 1031 when selling vacation properties. It is complete with different scenarios and the tax consequences of each, as well as citations to other cases, revenue procedures and rulings. Please feel free to use the handbook shown in this article.

From myself, and all of us here at API, have a great Northwest summer!

Cris Anderson is a Division Manager for Asset Preservation, Inc., a leading national "Qualified Intermediary." He may be reached at 877-909-1031 or cris@apiexchange.com should you have further questions.

This information is not intended to replace qualified legal and/or tax advisors. Every taxpayer should review their specific transaction with their own legal and/or tax counsel.

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