New case: A couple who owned a vacation home used it mainly for recreation. Then they swapped it for another home. But they never rented out, or offered to rent out, either of the vacation homes.

The couple had an expectation that they would receive a huge profit from an eventual sale. But this was not enough to qualify the homes as investment properties. Result: The exchange was subject to current tax.

Note: The tax result would have been different if the homeowner had attempted to rent out the vacation homes. In that case, the homes would have been treated as investment properties.