Exeter News Wire
William L. Exeter
President and Chief Executive Officer
Exeter 1031 Exchange Services, LLC
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FOR IMMEDIATE RELEASE
IRS Rules on 1031 Exchange of Vacation Properties
Safe Harbors Provided for 1031 Exchanges of Vacation Homes, Second Homes
February 20, 2008--San Diego, California--The Internal Revenue Service issued guidance as to when vacation properties, second homes and primary residences converted to investment properties would qualify for tax-deferred exchange treatment.
"The primary issue that needed to be addressed and clarified by the Internal Revenue Service was whether a vacation property, a second home or a primary residence that had been converted to investment property would be considered "qualified use property" and therefore qualify for 1031 exchange treatment," said Mr. William L. Exeter, president and chief executive officer, Exeter 1031 Exchange Services, LLC.
The guidance, in the form of Revenue Procedure 2008-16, provides real estate investors with specific safe harbors that clarify when a vacation home, a second home or a primary residence that was converted to investment property would be considered as "qualified use property" and therefore qualify for 1031 exchange treatment pursuant to Section 1031 of the Internal Revenue Code.
Mr. Exeter further stated, "This long awaited guidance regarding a 1031 exchange of vacation property and second homes was a direct result of the Treasury Inspector General's Report issued on Like Kind Exchanges last September which criticized the IRS for failing to adequately define when vacation properties and second homes would be "qualified use property" and would therefore qualify for 1031 exchange treatment."
"We were pleasantly surprised that the Rev. Proc. 2008-16 was so generous to real property investors. We expected it to be much more restrictive in terms of when vacation properties and second homes would qualify for 1031 exchange treatment," Mr. Exeter further commented.
You can learn more about the 1031 exchange issues involved in the like kind exchange of vacation homes and second homes in our article entitled "1031 Exchange of Vacation Properties: Do They Really Qualify?"
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Exeter 1031 Exchange Services, LLC is a leading national provider of Qualified Intermediary, Exchange Accommodation Titleholding, and Advisory services for individual, corporate and institutional 1031 exchange clients.
Exeter administers all types of 1031 exchange transactions, including forward, reverse and improvement (build-to-suit or construction) 1031 exchange structures, in all 50 states. Exeter 1031 Exchange Services, LLC currently has national office locations in San Diego, Irvine, Ontario, Bakersfield, Fresno, and San Francisco, California as well as Tucson, Arizona, East Northport, New York, Springfield, New Jersey and Winston-Salem, North Carolina.
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