selling a home tax question

#1 06-06-2004, 07:26 AM

zokko[at]mail.com (Zokko) writes:

- quote -

> We moved because we simply bought a larger house. I had
> lived in the original house ( now a rental ) for 5 years
> before we moved out. After Sept of 2004 I will no longer
> qualify for the 2 of last 5 years requirement. So it sounds
> like I've been given some "bad advice" ( albeit free ) from
> my friend who stated that I could claim a proration.

I may be missing something from an interim post, but based
solely on the facts above, I can't see why you wouldn't be
eligible for a $250,000 exclusion, possibly more depending
on the circumstances of your marriage.

Phil Marti
Topeka, KS

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06-02-2004, 09:54 PM

cj.green[at]worldnet.att.net (Christopher Green) wrote:
- quote -

> zokko[at]mail.com (Zokko) wrote:

> > I'm familiar with the "use" requirement of selling a home that you
> > must have lived in the home for 24 months within the last 5 years to
> > avoid paying capital gains taxes (for me and my wife that would be a
> > $500k exclusion). A friend of mine told me that the IRS has told him
> > that if he and his spouse could still avoid taxes if they went beyond
> > the 5 year treatment such that it would only be 1 year of the last 5
> > years, that you could still exclude $250,000 from capital gains. I've
> > checked everywhere but I haven't read anything to suggest that this is
> > true. Can someone shead some light on this subject?

> If they have an acceptable "unforeseen circumstance" that
> justifies them moving out and selling, they can get a
> pro-rated exclusion. Typical "unforeseen circumstances" are
> things like multiple births or unemployment, but don't
> include things like the need to take a profit while the
> market is high.

We moved because we simply bought a larger house. I had
lived in the original house ( now a rental ) for 5 years
before we moved out. After Sept of 2004 I will no longer
qualify for the 2 of last 5 years requirement. So it sounds
like I've been given some "bad advice" ( albeit free ) from
my friend who stated that I could claim a proration. From
reading this thread I would have to meet some unusal
cirtcumstances -- certainly selling to make tax free $$
doesn't qualify.

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#-1 05-29-2004, 01:53 PM

zokko[at]mail.com (Zokko) wrote:

- quote -

> I'm familiar with the "use" requirement of selling a home that you
> must have lived in the home for 24 months within the last 5 years to
> avoid paying capital gains taxes (for me and my wife that would be a
> $500k exclusion). A friend of mine told me that the IRS has told him
> that if he and his spouse could still avoid taxes if they went beyond
> the 5 year treatment such that it would only be 1 year of the last 5
> years, that you could still exclude $250,000 from capital gains. I've
> checked everywhere but I haven't read anything to suggest that this is
> true. Can someone shead some light on this subject?

If they have an acceptable "unforeseen circumstance" that
justifies them moving out and selling, they can get a
pro-rated exclusion. Typical "unforeseen circumstances" are
things like multiple births or unemployment, but don't
include things like the need to take a profit while the
market is high.

--
Chris Green

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