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Wendy Reed
Wendy Reed, Enrolled Agent
Category: Tax
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Experience:  15+ years tax preparation and tax advice.
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I own 3 rental properties. I want to acquire a second/vacation

Resolved Question:

I own 3 rental properties. I want to acquire a second/vacation home in Arizona. Can I do a 1031 exchange between my rental properties and the second/home? The second home will not be used as my primary residence.
Submitted: 8 years ago.
Category: Tax
Expert:  Wendy Reed replied 8 years ago.

Hello there, assuming that you are not going to use the second/vacation home as a rental, but as a second residence (personal use property), then it does not qualify as like-kind property for the purposes of a 1031 exchange. See "qualifying property" under Pub 544:


However, if you are not going to use the home as personal use property, and are instead going to rent it out, then you must follow specific rules for 1031 exchange, including using a qualifyied intermediary. Here is some information for 1031 exchange:

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