can i use 1031 exchange funds to purchase a tiny home?

[Brenda Turner]

I can't get a good answer from my 1031 exchange company and I need to act quick on an opportunity.  I'm reading that because it's on wheels, it's considered an RV and not real estate.  Assuming the answer is no since you need to exchange like for like.  Closing on a 4plex that was rental property.   If it's not on wheels does that change things?  

Thanks! I'm so intrigued and really want to do this!

[Dave Foster]

@Brenda Turner, The issue of wheels/no wheels is not the question.  Your intermediary should have told you that the issue is how that tiny home is taxed.  If it receives a registration certificate from the DMV as a trailer then it is not real estate and cannot be part of the 1031.  If it is attached (as in deeded as an improvement) to the property then a property tax bill is prepared by the county real estate appraiser.  And that makes it real estate.

It's the same distinction as a mobile home that you own the lot and home together (real estate and 1031 eligible) and a lot you purchase with a rental trailer on it (only the lot is real estate).

LIke kind is any type of investment real estate for any other type of investment real estate.  But the definition of what is real estate is left in large part to the state taxing authority.