Daddio - redhonda50_nojunk[at]yahoo.com wrote:

- quote -

Remember, there is a two year requirement between claims.

The only documentation that counts is IRS documentation,
everything you've read in this newgroup you have to
verify in IRS documents that YOU UNDERSTAND.

dick w

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Actually,

The condition of living in the house for two years over the
last five can, at 21/2 months at a time, be met (we spend
our summers down here). This solution is a surprise and not
anticipated. Do you know if this 'definition' of 'primary'
residence has been tested with the IRS? Is there any
documentation to support this approach available on the
internet?

Thanks again for all the help and advice... Selling the kid
was something I had considered... but the wife wouldn't go
for it....

regards,
Daddio

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Daddio - redhonda50_nojunk[at]yahoo.com wrote:

- quote -

As I (non-professional) understand it, the 2 year
requirement is not continuous. From one of the tax books
"You qualify if you can show you owned and lived in it ...
for 730 days during the 5-year period ending on the date of
sale".

So move to Ocean City in 3 years, but you don't have to live
there 2 years, but only until you meet the 730 days in the
last 5 years test. Keep good records of this and comming
summers and you might knock a year off. I've no idea if
weekends, christmas, etc., count.

I'd make a long line and lay out the years and occupancies
as the 5 years is a moving window. Think of it this way, if
you are living in Ocean City at the beginning of a summer
and have 700 days occupancy (including a 5 year old summer)
then at the end of the current summer you would still have
only 700 days occupancy - as each day was added for the
current summer you lost a day from the 5 year old summer!

With the above, you can work out how long you have to live
at Ocean City after son finishes high school. Subtract 2
years from that and you know when you have to sell your
current home since claims must be two years apart. But you
still want to live there, so a lease has to be part of the
deal (or an apartment or another rental house).

Now you do the math - what does it cost, what risks do you
assume?

dick w

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Daddio - redhonda50_nojunk[at]yahoo.com wrote:

- quote -

Option 1:
Sell your house now, move to Ocean City (winters there are
very quiet), have your son finish high school there, then
sell that house and get the exclusion twice.
Option 2:
Sell both houses now, move to Florida (summers there are
hot and humid), and have your son finish high school there.
Option 3:
Sell both houses now, sell your son, and move to Florida.

Dick

Please note that, as of today, my North Carolina CPA license
is in INACTIVE status. I am, therefore, NOT holding out in
any manner whatsoever.

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Daddio - redhonda50_nojunk[at]yahoo.com wrote:

- quote -

This seems to be the "deal breaker" in your strategy.

- quote -

Such a swap would be considered a sale and subsequent purchase by the
IRS, and is not tax free. You would owe tax on the capital gains in the
year of "sale".

- quote -

You would if you actually resided in the OC home (which you
don't want to do). Just because you change your primary
residence address doesn't change your exclusion timeline
until you actually LIVE there for two or more years.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << It may not be relied upon for the purpose of avoiding > << penalties that may be imposed on the taxpayer or the > << tax preparer. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

"Daddio - redhonda50_nojunk[at]yahoo.com" <redhonda50[at]yahoo.com> wrote:

- quote -

Yes. You can't do it. "Swaps" are not available for
personal-use property.

- quote -

Yes.

Let's stop being overly enthusiastic about avoiding taxes
and take a rational look at things. In the 5 or so years it
will take you to sell both Maryland properties with a
fistful of tax-free gains, you'll still lower the average
age of your eventual Florida community when you eventually
move at age 61 or so.

Besides, if your eventual retirement home isn't going to be
there in 5 years, do you want to be in it when whatever
happens to it?

--
Phil Marti
Clarksburg, MD

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << It may not be relied upon for the purpose of avoiding > << penalties that may be imposed on the taxpayer or the > << tax preparer. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

I hope this question/problem is not out of line for this
group.

My wife and I are 56 years old and would like to eventually
retire in Flordia. Originially we planned to retire in
Ocean City Maryland, where we purchased on 1991 a secondary
residence we use for vacations, which has never been rented.
The purchase price was $140,000. The house is now valued
at $500,000.

We currenly live in our primary residence also in Maryland
which was purchased in 1981 for $140K, and how is valued at
$700,000.

We would like to be in the Olney Maryland house for another
3 years while my son finishes High School.

The strategy to minimize taxes would be to move to the Ocean
City house in three years and then live there two years to
reset the 250/250K exclusions, however we would like to get
to florida sooner than that. Any ideas about doing some kind
of swap for a vacation house in Flordia now and then just
moving directly there in three years???

I could begin the process of changing primary resicence to
the Ocean City address, but then I would lose the exclusion
on the Olney house, correct?

Thanks in advance, all ideas are welcome.

Daddio...

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << It may not be relied upon for the purpose of avoiding > << penalties that may be imposed on the taxpayer or the > << tax preparer. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >