1031 possible for vacation/second home?

[Jenni Villane]

We have had a second home for almost 2 years. The house is not a formal rental property even though we allow friends and family to use it. No rental fees are paid to us currently. However, this home is not our primary residence by any stretch.

We have gotten into rental properties over the past year and are wondering if we can use a 1031 exchange if we sell our second home and buy a true rental going forward. Does the fact that the second home was not a true rental/investment affect the ability to use a 1031 process?

Thanks in advance for the input.

[Jenni Villane]

Thank you for the feedback.