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Selling Two Homes |
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Hi Edith - my wife and I own a resort town condo, Rehoboth Beach, get away home in Delaware while our primary residence is in Maryland.
Is it possible for me to claim my primary residence in Delaware in order to save on the captial gains tax upon it sale? What would be the living requirements if this is possible?
I plan to retire in 3 years (have owned the 2d home in DE for three years) and we plan to both retire to DE within 4 years. We will put the proceeds of the sale from both homes to the purchase of our retirement home in DE.
Thanks. |
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To use the homesellers capital gains exclusion you must have owned and occupied the place as your main residence for at least two of the five years before the sale. The two years need not be consecutive; you could have accumulated the required residency during those five years.
The IRS has never nailed down just what your main home means, except that it's "where you live more of the time." When it challenges someone's tax return, they look at your voting address, your driver's license, the address on your tax returns.
This homesellers tax break is not one-time-only, by the way. You can use it over again on another main home, as often as every two years. |
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Edith
Originally published on February 5, 2008 |
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