Mike Walsh wrote:

- quote -

To achieve your stated objectives, I can see one way. Move
into the beach home and make it your primary residence for
two years, perhaps while starting the remodel on the other
property. Then sell the beach home and take the half mil
exclusion (and pay off construction loans?).

Making the beach home your second home doesn't do anything
for you.

BC


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Mike Walsh wrote:

- quote -

The rule you are thinking about went out 10 years ago.
The present rule is: If you own and live in a property as
your main residence for 2 of the previous 5 years, you may
sell the property for a profit of $500K (married filing
jointly) and not pay any tax on the gain. The rule for
singles is $250K. The only way for you to not pay any tax
on the profit is to move into the house for 2 years and then
sell it. After you sell the property you may do (after taxes
are paid if needed) whatever you want with the proceeds.

Missy Doyle

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You seem to be ignoring the fact that second homes are
subject to capital gains tax just like rental properties

Rgs,

Mark

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My wife and I are considering selling a beach house we have
owned for 4 years. In that time it has appreciated a fair
amount so we'd like to minimize the tax implications to the
extent possible. As I understand it, if we simply sell it
and don't buy another property, we will have to pay taxes on
the gains. At this time I don't believe we will purchase
another property but if we did, it probably not be a rental
property.

What I'd really like to do is apply the proceeds to our
primary residence as it is an older home which needs a fair
amout of renovation as well as an addition. Is there any
way to do this? We currently account for the beach house as
a rental property and not a second home (schedule E). If it
were a second home, would we be able to do what I'd like to
do? How long does a rental home have to be off the market
as a rental before it can be considered a second home?

Thanks for any advice.

Mike

--
Mike Walsh - mike_walsh at mindspring.com

<< ================================================== ===== > << 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. > << ================================================== ===== >