Good News for Vacation and Second Home Owners
Revenue Procedure 2008-16 - Safe Harbor for Exchanges of Vacation Homes and Conversions to or from Personal Residences
This revenue procedure, which will be effective for exchanges occurring on or after March 10, 2008, establishes a safe harbor regarding when a vacation home can be considered investment property and traded in a §1031 exchange. The ruling states that a vacation home qualifies for a §1031 exchange if the investor owns the home for at least 24 months, rents it for at least 14 days for each 12-month period, and uses it no more than the greater of 14 days per year or 10 percent of the number of days during the year that the home is rented. These requirements apply to both the relinquished and replacement properties.
For purposes of this revenue procedure, a vacation home, also called a "dwelling unit" in the Revenue Procedure, is real property improved with a house, apartment, condominium, or similar improvement that provides basic living accommodations including sleeping space, bathroom and cooking facilities.
For a link to the ruling, please click here.
Please contact us at First American Exchange Company if you need further clarification.
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As always feel free to contact our office directly if you have any questions; or should you be interested in property in the Lake Tahoe area
Alvin Steinberg, CRS
Coldwell Banker Incline Village Realty
917 Tahoe Blvd., Suite 103
Incline Village, NV 89451
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www.LivingLakeTahoe.com
email: Alvins@cbivr.com
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