Revenue Procedure 2008-16 provides a method for section 1031
like-kind exchanges of homes that are rented out or otherwise held as
income-producing properties but also used occasionally by taxpayers
for personal purposes. Dwellings will be considered held for
productive use in a trade or business or for investment if, in each
year of the two years immediately before the exchange (relinquished
property) and two years after (replacement property), the taxpayer
owns the dwellings for the entire period and rents them at fair rental
for at least 14 days, and the personal use in each of those years does
not exceed the greater of 14 days or 10% of the number of days rented.
The procedure is effective for exchanges on or after March 10, 2008.