7/24/2004

Vacation Homes--What to Do About Taxes

This is the time of year for taking a vacation, or at least thinking about it if you haven't already. Buying a second home has a practical side to it: The IRS says it does not qualify for 1031 tax exchanges because it's a personal use property, not an investment, particularly when any income from it is less than the fair rental market, and if you rent it more than 14 days a year, you must pay taxes on the income. To minimize your capital gains tax consequences when selling, first move into it and convert it to your principal residence. For more on vacation homes, click and read the article.

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