In article <SkMnk.16978$b81.10140[at]fe091.usenetserver.com> ,
jack <jack[at]yahoo.org> wrote:
- quote -




When you sell your main home, that you owned and lived in as your main
home for at least two of the past 5 years you can exclude the first
$250,000 of gain (500,000 for some married copuples filing jointly).
The law is changing so if you had business use during that 5 years
you might have to prorate he exclusion amount.


So unless you moved into your cottage and used it as your main
home for at least two of the five years before sale, you cannot
exlcude anything.


One way to possibly lower taxes is to take back the mortgage
on the cottage and that way you include on that year's gain
in your income,. This is called an Installment Sale.



- quote -


Unfortunately it is quite possible for a large long term gain to add
to your AMT woes. And those woes include any property taxes you paid
for each property, which are not allowed for AMT.

--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

--
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I may be selling a cottage with a significant capital gain. On the other
hand, my house isn't worth any more than I paid for it 16 years ago, and it
isn't likely to increase in value any time soon.

I know (or at least I think I know) that capital gains on a residence isn't
taxed (what exactly is the law on that?) but since I won't ever have any
capital gains on my residence, is there any way to get that to apply to my
cottage?

This year I will be deep into AMT because I have very little earned income,
a decent amount of dividends/interest, but a lot of deductions. Would the
capital gains on the cottage affect that at all?

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >