Trade the building for the water

Both deadlines start the day your relinquished property closes: 45 calendar days to identify replacement property in writing to your qualified intermediary (QI), and 180 calendar days to close. The QI must hold your proceeds throughout — touch the cash and the exchange dies. Under the standard three-property rule you may identify up to three candidates regardless of value.

The 180-day clock is why exchange buyers can’t use pre-construction: unbuilt homes can’t promise a closing date, and deposits on future property generally aren’t like-kind real estate. What fits: existing, deeded single-family homesthat can close on your schedule. The Founders’ 13 at Marlin Bay are standing, completed residences with live published pricing — identifiable today, closable inside any 180-day window.

The investment-use test is the second fit: Marathon licenses vacation rentals at 7-day minimums, and the 13 residences already operate inside the resort’s rental program (~$200,000 reported first-year gross for managed waterfront homes) — documented rental operation from day one, which is exactly what the safe harbor wants to see.

Rev. Proc. 2008-16 gives vacation property a safe harbor: for each of the two years after acquiring the replacement home, (1) rent it at fair market value for 14 or more days, and (2) keep personal use within the greater of 14 days or 10%of the days rented. Inside those lines, the IRS won’t challenge the investment-intent of your exchange. A home renting 200 nights a year allows 20 personal nights — a February on the flats, inside the safe harbor.

Exchange structures, state conformity, depreciation recapture, and entity questions are individual. Engage a qualified intermediary before your relinquished sale closes, and run the Keys specifics — rental licensing, the Submerged Land Lease on slips 1–79, HOA documents — past your CPA and attorney during identification.