Moving To His House

Expert, localized Los Angeles answers provided by Heather Roy

Moving To His House
	Dear Edith: I currently own a home with a mortgage balance of approximately $50,000. I know it would sell for a lot more. I will be moving into the home of my fiance' sometime at the end of the summer. I am paying for half of an addition onto his current home. My name is now on the deed to his home.Once the addition is complete and I move in I am contemplating selling my home. What taxes (capital gains) will I end up paying since I won't be purchasing another home but I will be paying for half the cost of the addition. Is there a better way to handle this situation?

	Forget about the mortgage part. It has nothing to do with figuring your capital gain. And you can also forget about buying a replacement home, because that no longer interests the IRS. If you've owned and occupied your present residence for at least two years (out of the five before the sale) then you can take up to $250,000 gain free of federal tax.
	Edith Originally published on May 15, 2005

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