Can I do a 1031 property exchange to buy a cottage here?
Yes, if you take advantage of the rental program. A 1031 property exchange allows you to sell one type of rental property and exchange it for another type of rental property to avoid capital gains taxes. For example, you could sell farm land that you rent and exchange it for a cottage here if you don’t use it more than 2 weeks a year and if you rent your cottage. You could also buy multiple fractions if you desire. Once again, consult your accountant for tax advice. If you need a 1031 Facilitator, we will be glad to provide you the name of a local Facilitator or your accountant can provide you information about one in your area.