If you are considering purchasing a second home as an investment, you need to be familiar with the rules of a 1031 Exchange.  The way you use your second home can determine if you will qualify for the Exchange when it comes time to sell.  The amount of time you spend in your home, if it's available to rent, and even the way your accountant carries the property on the books can affect your eligibility.

A 1031 Exchange allows you to defer taxes on any gains you may make on a property as long as you reinvest them quickly.  As with most tax laws, there are a lot of factors that determine your eligiblity.  Make sure you are informed about these requirements so if you decide you want to do a 1031 Exchange down the road, you are able to.

Contact Joanne Hanson for more information on how a 1031 exchange can work in your situation.

 Please Note:  Joanne Hanson and The Mountain Living Team are neither accountants nor tax advisors and, while are knowledgeable about the 1031 exchange, they do not substitute for your financial advisor.