1031 Exchange on Second Home

[Mel Adams]

Hi all - I have an out of state property I purchased in Dec 2021 (less than two years of ownership) using a second home loan. It was purchased with the intention of being a second home as I have family in the area, but it’s rented the majority of the year. In the last year I used it for less than 14 days and it was rented for the bulk of the year (short term and mid term rental). 

Does this qualify to do a 1031 exchange? I thought 1+ year of ownership was sufficient, but now I’m seeing 2+ years specifically for second homes. I’ve read intent is also important, but how subjective is that? Me wanting to sell this property is contingent on being able to use a 1031 exchange, so I don’t want to get 70% of the way there then realize I can’t do the exchange. 

Any input is appreciated, I’m a novice in this area. Thank you! 

[Dave Foster]

@Mel Adams, You rightfully went to Rev Proc 2008-16 and read the safe harbor there.  Important to remember that the rev proc is a safe harbor and not a requirement.  And even in that safe harbor there's a lot of dancing room.  Like @Jeff Copeland said, a year and a day is actually two tax and calendar years (both phrases used by the IRS).  Your personal risk profile will have something to do with your decision.  But as a general rule - the more you use it personally the higher the bar to demonstrate your investment intent.  Since your use is minimal you're in pretty good shape.