I'm doing my taxes and have a question, or a few....
Here's the situation:
Last year, we sold our Nautical Estates Condo which we frequently rented out through a local rental/management company. We took the proceeds (which we received a 1099 for)and purchased a home for our exclusive use, but to avoid the capital gains taxes we completed the paperwork for a 1031 Exchange. In 2003, we had income on the condo, and we allowed friends to "rent" the house from us a few times.
This year, however, we did rent the house for a 3 month period to "snowbirds" and we will be 1099'd as we went through our property manager.
I only want to rent for the 3 months, and I think we have to make the property available for 24 months for rent from the date of purchase.
Do any of you have experience with this? If so, what did you do? I want to be legal with the IRS but I also want to reduce my tax liability just like any other American!
Thanks in advance...