According to a new IRS ruling, the property must first be held by the taxpayer for 24 months to qualify for a 1031 exchange. In addition, during each 12-month block of this holding period, the owner must have rented the vacation home for at least 14 days at a fair market rent. Also during each 12-month block, the owner is only allowed to use the property for the greater of 14 days or 10 percent of the days rented. Owners are also allowed a reasonable number of "maintenance days" to care for the unit.
Check with your accountant & the IRS if you have questions. Another local source is Hill Country 1031 Exchange, located here in Horseshoe Bay. If you're looking for someone to help manage your rental property, check with Sandy Terkelson at Horseshoe Bay Resort Rentals.
For more information about real estate in Horseshoe Bay, check my web site: http://www.JanBusse.com/