1031 Exchange for an RV Park or Campground

Nightly guests do not disqualify a campground; it is trade-or-business real estate

Section 1031(a)(1) applies to real property held for productive use in a trade or business, and a campground that rents sites by the night, the month or the season is exactly that. The transient nature of the customers matters for lodging taxes and depreciation, not for like-kind treatment.

The exclusion that can bite is section 1031(a)(2), which denies the exchange to real property held primarily for sale. An owner who has been platting and selling deeded RV lots to customers is a dealer as to those lots, while the operating park remains business property; if lot sales are part of your plan, read raw land and lots first.

Since 2018 the exchange covers real property only (Reg. 1.1031(a)-1), so the work in a park sale is sorting the property into the real estate that can be exchanged and everything else.

Pads, roads and hookups are real property; park models and rental rigs are vehicles

Reg. 1.1031(a)-3(a)(2)(ii)(C) names roads, paved areas, fences, in-ground swimming pools, stationary docks and permanent outdoor lighting as inherently permanent structures, and bathhouses, offices and camp stores are buildings. Buried water, sewer and electric lines serving the sites are tested under the same permanence factors and, failing that, under the law of the state where the park sits (Reg. 1.1031(a)-3(a)(6)).

Park models are different. Under 24 CFR 3282.15 a unit built to ANSI A119.5 is a recreational vehicle rather than a manufactured home, and it must carry a notice that it is “designed only for recreational use, and not for use as a primary residence or for permanent occupancy.” Titled units, rental RVs, golf carts and boats are personal property whose price is taxed in the year of sale, with section 1245 ordinary recapture up to the depreciation you claimed.

A mixed park with HUD-code mobile homes on permanent foundations may hold real property in those homes under state law; that situation is covered on mobile home parks. Cabins on foundations are buildings and exchange with the land.

• Exchangeable: land, roads, pads, utility lines, bathhouses, office and store, cabins on foundations, pools, stationary docks, fences
• Taxed at sale: park models, rental RVs, golf carts, boats, furniture, store inventory, goodwill, the operating permit

Bonus depreciation on 15-year site work comes back as ordinary income unless the replacement absorbs it

Roads, sewers, drainage, fences and docks fall in MACRS asset class 00.3, land improvements, with a 15-year recovery period (Pub 946, Table B-1). Property with a recovery period of 20 years or less qualifies for bonus depreciation, and the 2025 edition of Pub 946 confirms 100 percent bonus for qualified property acquired after January 19, 2025, so many park owners have expensed their site work.

Pub 544 treats depreciation above straight-line on section 1250 property as “additional depreciation,” taxed as ordinary income when you sell. In a like-kind exchange that recapture is taken into account only up to the greater of the gain recognized or the recapture amount less the value of section 1250 property you acquire, so a replacement of at least equal value defers it, while cash boot pulls it out first.

Hypothetical: you spent $450,000 on pads, roads and utilities three years ago and expensed all of it. Straight-line over 15 years would have been $90,000, so $360,000 is additional depreciation. Exchange into $2,000,000 of DST or direct real estate and that $360,000 stays deferred; take $360,000 of cash instead and it is ordinary income before any capital gain is reached.

The operating permit stays with the health department, and a business license is not real property anyway

Reg. 1.1031(a)-3(a)(5)(ii) says a license or permit to engage in or operate a business on real property is not real property, whatever state law calls it. A campground permit is therefore outside the exchange, and in many states it does not transfer at all.

Florida is a clear example. Chapter 513 requires a Department of Health permit for any RV park or campground, the permit “is not transferable from one place or person to another,” it must be renewed annually, and a buyer must apply within 60 days after the transfer with a copy of the recorded deed. The department inspects at least once a year, and the fee runs between $3.50 and $6.50 per space with a $600 cap (Fla. Stat. 513.02, 513.045 and 513.052, as in force in 2026).

Write the buyer's re-permitting, well and wastewater approvals into the contract so a permit condition cannot push the closing after you have already committed to replacement property.

Seasonal income changes the appraisal and the buyer pool, so control the closing date

Buyers and lenders value a park on a full year of results, because a summer park can earn most of its revenue in four months. Provide twelve consecutive months of income, occupancy by season, and the split between annual, seasonal and transient sites; Sun Communities, the largest public owner, reports its 166 RV communities the same way, with 32,100 annual and 24,830 transient sites at the end of 2024.

Environmental diligence is lighter than for a service station but not absent: septic fields, wells and any fuel tank are the usual items, and for rural acreage EPA's All Appropriate Inquiries rule accepts a Phase I under ASTM E2247-23, the forestland and rural property standard, with the same 180-day and one-year update rules.

The 45-day identification and 180-day exchange periods start at closing, so a closing after the season ends gives you the winter to inspect replacements; the mechanics are on the deadlines guide.

Leaving operations: a family park into multifamily, storage or net-lease DSTs (worked example)

RV-park DSTs are scarce; a search of SEC Form D filings through September 2026 turned up none, while sponsors do list multifamily, storage, industrial and lodging trusts. A retiring family that wants sector exposure without the reservation phone usually spreads the proceeds across several trusts.

Hypothetical: a family sells a 120-site park for $4,000,000 with $200,000 allocated to park models and equipment. The $3,800,000 of real-estate proceeds could be identified under the three-property rule as $2,000,000 in a multifamily DST, $1,200,000 in a self-storage DST and $600,000 in a net-lease DST. The multi-family and self-storage pages describe those asset classes, and DST minimums and sizing covers how the split works.

Breakwater Exchange, a 1031 exchange broker with more than 20 years of experience, arranges those placements with vetted national DST sponsors; reach us through the site form. Ask your CPA to check the recapture figures and your state's permit rules before you fix a closing date.