Lee Choquette wrote:

- quote -

The law that substituted an exclusion of up to $250,000 ($500,000 for a
married couple filing jointly) for the old 'replacement residence' rules
went into effect in 1997. She should ask the realtor to put the advice
regarding rollover in writing, and then go right to the local board of
realtors. People who claim to be professionals, yet give such incorrect
advice, should be forced out.

That said, your advice on the timing of the sale is right on
target. At this point, she'd have a long term cap gain, but
by waiting, she can walk away with no tax due. See the irs page
http://www.irs.gov/newsroom/article/...105042,00.html
to verify the facts. Boards are best used to lead you to
solid sources of information.

Good luck,
JOE

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

"Lee Choquette" <leec[at]xmission.com> wrote:

- quote -

The first thing to do is to have her get a new realtor and
report the current one to the local board or state licensing
agency for being incompetent at best or unethical at worst!

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Lee Choquette wrote:

{SNIP}

- quote -

Yes. Tell her to get a new realtor.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Lee Choquette wrote:

- quote -

There is a wonderful joke about Swartz the great Gorilla
hunter who hunts with only a dog and an employee who carries
a gun. To cut to the chase, Swartz traps a Gorilla in a
tree, shakes it out of the tree, and the dog runs up and
bites the Gorilla in the groin. However, should the Gorilla
shake Swartz out of the tree, Swartz yells "SHOOT the dog."

So in response to the OP, I write: "SHOOT the dog."

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Taxpayer is desperately seeking a way to avoid paying
capital gains tax on her sale of a residence that she has
owned and occupied for about 15 months. Please confirm or
refute my understanding:

1. Since she has not owned and lived in the house for two
years, she would have to pay tax on the gain at the
long-term capital gain rate. None of the exceptions (death,
multiple births etc.) appear to apply.

2. A realtor is assuring her that she can roll the proceeds
of this sale into her next house tax-free with a Section
1031 like-kind exchange. I don't see how this is possible
for a personal use property. Is it? Since this realtor is
telling her what she wants to hear she is desperate to
believe. Of course, this realtor will have long since
collected his commission and moved on before any problem
becomes apparent.

There is nothing such as a job change requiring her to move
out of the area, but after paying the capital gain tax she
would not have enough left to pay off the rest of her debt.
I advised her to wait and list the house three months before
the two years are up, accepting any offers under the
stipulation that closing and moving out happens no sooner
than the two-year mark.

Is there anything I have overlooked?

Thanks,
Lee

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >