Normally, taxpayers can fully deduct casualty losses on business property or income-producing property (e.g., a rental property) on their personal return, but not those on personal-use property
(e.g., a house, car or boat).
Business property is eligible for like-kind exchange treatment, while personal-use property is not.
Under which of these circumstances (if any) would the replacement property be deemed held by P as personal-use property, rather than as business or investment property, immediately after the exchange, thereby precluding Sec.
Neither the Code and regulations, nor the cases, set a "bright line" test of how long rental use must continue before property can be converted to personal-use property. A taxpayer's intent to hold property for business or investment use is determined at the time of the exchange.
1.168(i)-4(b), personal-use property
converted to business or income-producing use is deemed MACRS property placed in service on the date of conversion.
It is also necessary that the residence be treated as personal-use property
for which no business deductions are claimed through the duration of ownership by the entity.