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Apartments Are Residential |
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Dear Mrs. Lank, I recently inherited a five-unit apartment building last year. If I live in one of the units for two years am I eligible for the homesellers capital gains exclusion of $250,000 when I sell it? |
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If you live in one of the five units for at least two years, when you sell the building the IRS will assume you've had two transactions.One is the sale of four-fifths of the building, profit subject to capital gains tax.The other would be sale of your own residence, one-fifth of the total price, qualifying for homesellers tax exclusion.
If you simply want to sell now, though, you should have little or no axable gain. That's because when you inherited the property last year you received a new cost basis, its value at that time.
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Edith
Originally published on January 6, 2006 |
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