|
New Vacation
Home Ruling...
While vacation or second homes [see:
1031 vacation home update:
May 2007] have generally been treated as investment property, a Tax Court case released last month is a text book case on how to have your vacation home exchange disallowed.
This taxpayer
had two major problems:
| |
1) |
they
did absolutely nothing to
indicate their investment
intent for their property,
and, in fact, almost everything
they did seemed to prove
that they had NO investment
intent. And, |
| |
2) |
they
got no help from either
their intermediary or their
attorney to help build
their case that the properties
were held for investment. |
We’ve always encouraged our clients to document the investment intent of their vacation home ownership. We also handle, for free, the audits of any of our client’s exchanges, so, had they used us, we would have helped them build their case. The truly unfortunate aspect of this case is that now there is a court case that disallows vacation homes for lack of investment intent.
--The
Experts |
TEE-Shots
are Tips
from the Exchange
Experts
that are designed to make you
think about, and ask questions
about, the 1031 exchange process. |
