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This is certainly a question for your CPA, however, the 1031 exchange is for investment property. Your second home is a second personal home which you probably were claiming the interest from your mortgage on your taxes. You are allowed two personal homes – since you did not rent it or claim as a rental(?) makes it exempt from any additional taxes. The mortgage interest from your second home was a write off on taxes, 1031 exchange is to defer income from a sale on investment property.
10 months ago
Carrie Otters
said:
We had a mortgage on it for 1 year and then paid it off. That first and second year we did use it as a rental investment property but not for the past 8 years. I wonder if there is a statute of limitations on when it was an investment property and when it became a second home. I will ask my CPA though. Thanks.
10 months ago
David Jackson
said:
@Carrie Otters most likely you already paid taxes on that income… yes would be best for your accountant to answer, good luck. YW
We purchased a second home 10 years ago which we used as a vacation rental for the first 2 years. It has not been with a rental company nor has been rented out for the past 8 years. If we sell it are we hit with the 18% tax on rentals? What can we do to avoid that?
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