wr99 wrote:

- quote -

You're right on that score.

- quote -

No exclusions, but at least the gain will be capital gains,
long term even.

- quote -

But if you sell grandma's house, what in the world will
happen to her?

ChEAR$,
Harlan Lunsford, EA n LA

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Sorry, but I think you are out of luck. No exclusion on
home unless you move back in and get the two years needed.

Don in Colorado

<< ================================================== ===== > << 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 (2006) - All rights reserved. > << ================================================== ===== >

Hi there!

Thirteen years ago we built our home on 47 acres. Then,
nearly 5 years ago, gramma came to live with us and so we
built a little house 25 feet from our home for her to live
in. Then we had more children and outgrew our home and
decided to build another on the same 47 acre tract - that
was about three years ago. At this point, there are three
separate mailing addresses related to this 47 acre tract of
land and we own all of it.

Now we want to get out of debt. We decided the best way to
do this was by selling our old home with gramma's house on
23 acres of land, and we plan to keep the new home along
with the balance of the land. Great so far, right?

Now the problem, we have lived in the newer home for 3 years
and 3 months, i.e. we have not lived in the old house we
want to sell for 2 of the past 5 years. Therefore, based on
my understanding of the tax code, it looks like we may not
be able to skate through the gains tax with the $500K
exclusion.

But wait, gramma has continued to live in her house next to
the old place and we claim her as a dependent. Plus, I have
not rented either our old house (my sister moved into it
when we moved into the new bigger house) or gramma's house
for any of the past 13 years.

In spite of our technically failing the residence time
requirement, can I still make a reasonable claim of the
capital gain exclusion when we sale the old place?

I am hoping so since we have continuously lived on the same
tracts of land, had a dependent in one of the houses, and
never rented any of the properties out.

What do you experts think? Is this just wishful thinking?

Thanks for taking the time to consider this mess!

wr99

<< ================================================== ===== > << 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 (2006) - All rights reserved. > << ================================================== ===== >