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Selling Summer HOme |
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I am selling my summer home that we have owned for 9 yrs. We spend approx 5 months a year there. What are my tax obligations for capital gains? Is this considered a primary residence? |
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Your principal residence is the place where you live most of the time. In case of a question, the IRS will also look at thing like the address on your driver's license and your tax returns. My guess is that the sale of your summer home won't qualify, but there's always a question about whether the required 24 months' principal use could be accumulated over a period of several years, in order to qualify for the tax break. If your profit will be considerable, it may be worth consulting the best tax lawyer or CPA you can find.
If you can use the homsellers exclusion, you could take up to $250,000 profit free of federal tax (twice that for a married couple filing jointly.) If you can't, your gain is taxed as long-term, no more than 15 percent federal, less than that for the state. |
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Originally published on September 18, 2007 |
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