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Vacation Home 1031 Safe Harbor Calculator

Vacation homes need safe-harbor use pattern. This calculator checks compliance.

Safe harbor compliance

COMPLIANT

Personal use Y1 threshold

14

Personal use Y2 threshold

14

How the math works

Safe harbor: rented ≥14 days AND personal use ≤ max(14, 10% of rentals) for each year.

Track vacation-home use in a contemporaneous log. IRS audits on §1031 vacation-home exchanges often rest on 'prove you rented 14 days' — without rental receipts and dated records, the default assumption is personal use and safe harbor is forfeited.

How to Use

  1. Enter days rented year 1.
  2. Enter days personal use year 1.
  3. Enter days rented year 2.
  4. Enter days personal use year 2.
  5. Read safe harbor compliance.

Frequently Asked Questions

Safe harbor test?

Rev Proc 2008-16: For 24 months before/after exchange: rented at fair value ≥14 days per 12-month period, personal use <14 days or <10% of rental days. Both years must meet. Safe harbor = IRS won't challenge 'held for investment.'

Outside safe harbor?

1031 still possible, but IRS can challenge. Must prove 'held for investment or business.' Rental history, marketing efforts, business intent documentation. Higher audit risk. Most advisors recommend staying within safe harbor.

Common mistakes?

Using property >14 days per year (exceeds personal use cap). Not renting at fair market (family friend rent). Failing to record rental days accurately. Converting to personal use within 24 months post-exchange.

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