1031 Tax Exchange

Q: In the past 8 years we owned our vacation home outright, property values have increased significantly in that area. Do you think if we sell our vacation home and buy another more expensive vacation home, can we transfer any profit to the purchase of the new vacation home without income tax consequences?

A: You should be able to take advantage of a 1031 exchange (like kind exchange). You cannot receive any proceeds personally. Usually the title companies can take care of this. A lot of banks do to. You will need to discuss this with the title company before they attempt to do it. There are special rules to qualify.