It is both a rental and a second home. We rent it for part of the summer and use it for part of the summer.

It is not an issue of debt, the issue is to lock in the gain on the property, and roll it into another hopefully as sucessful investment. It is an 3 year old house and I feel has hit its peak for appreciation. And I guess luckily for me the cap gains is substantial. So I thought the 1031 option was the best option to avoid the cap gains taxes.