2007 5/30 tax court Memo says “Taxpayer who exchanged their vacation home for another vacation home were not entitled to treat the transaction as a like-kind exchange because the properties were not held primarily for investment.”

Taxpayer has a vacation home which was sold before another vacation home purchased. They want to defer the sales gain by applying like-kind exchange rule under section 1031. The tax court says since taxpayer never rented or attempted to rent the property to others, they failed to satisfy the basic requirement for a like-kind exchange because the property was not held primarily for investment purposes.