- quote -

From the IRS web site:

Taxpayers may exclude gain on a home sale, provided they
have owned and used the home as a principal residence for
two of the five years before the sale. A reduced maximum
exclusion may apply to those who satisfy part of the
two-year rule. Military personnel often retain ownership of
a home while away on duty but eventually sell it without
returning to live in it, perhaps failing the use test
completely.

The new law allows persons on qualified extended duty in the
U.S. Armed Services or the Foreign Service to suspend this
five-year test period for up to 10 years of such duty time.
A taxpayer is on qualified extended duty when at a duty
station that is at least 50 miles from the residence sold,
or when residing under orders in government housing, for
more than 90 days or for an indefinite period.

This change applies to home sales after May 6, 1997. A
taxpayer may use this provision for only one property at a
time and may exclude gain on only one home sale in any
two-year period. Although an amended return must usually be
filed within three years of the original return’s due
date, the law gives qualifying taxpayers who sold a home
before 2001 until Nov. 10, 2004, to file an amended return
claiming the exclusion.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Hello,

Can anyone lay out the new timeline for the capital gains
exclusion on home sales for members of the military? The
Military Family Tax Relief Act has been signed into law, but
the more I read it, the more confused I get.

Here is my situation:

Lived in house from March '85 to December '91.

December '91 moved to Germany on active duty orders, rented house out.

I've been on active duty ever since, and house has remained a rental
property since I left in '91. Can I qualify for the exclusion under
the new rules? If so, how long do I have before the clock runs out?

Thanks in advance.

-Bryan

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->