Sure.  The taxpayer can sell the lot for less than his Basis in the lot.   😁

If the sold "lot" and/or the "vacation home" is for personal purposes, any gain will be taxable.

Thanks for your quick reply.  Yes it is for personal use.  I have been reading the Like kind exchange 1031, but I really do not understand it.  That is why I reached out to the community.

Read a bit more & you will see that § 1031's don't work for personal use property.

👍I also believe you have to get a qualified intermediary for 1031 exchange but this is just my opinion

"I have been reading the Like kind exchange 1031, but I really do not understand it. That is why I reached out to the community."

My favorite articles lately have been found on Investopedia:

https://www.investopedia.com/financial-edge/0110/10-things-to-know-about-1031-exchanges.aspx

1031: "Let's sell that marina and buy a shopping center."

Not 1031: "Let's sell a lot, buy a different lot and build a vacation home."

I describe it to my clients as "carrying over the invested value to the new project."

"I also believe you have to get a qualified intermediary for 1031 exchange but this is just my opinion"

That's not just opinion; you cannot touch the funds (needs to be handled as escrow) or DIY.

to PATAX yes, I read about the intermediary.  But taxpayer will not go that route.

So it looks like it is going to be a selling transaction taxable to taxpayer.  Thank  you all for your input.

qbteachmt:   Thanks for your examples.  It helps to put it in layman terms for the taxpayer

QB I usually end my statements with the phrase just my opinion... That does not mean what I stated is an opinion of someone else ...Don't get worked up... Just my opinion

"I usually end my statements with the phrase just my opinion"

I'm just trying to give you credit that it's more than opinion; it's fact.