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Posted by Herb Smith on May 9, 2007, 4:13 pm
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> My sister has lived in her house for 3 years, BUT the first
> 2 years my husband and I legally owned the home. =A0She bought
> it one year ago and now wants to sell it. =A0She has no
> extraoridinary reasons for wanting to sell it other than she
> can make some money on it due to rapid appreciation in our
> area.
>
> The real estate told her she doesn't have to live in a home for 2
> years to get cap gain treatment on any profit she makes on her house.
>
> What is the story?
The "story" is that she will pay capital gains tax on any
appreciation in value, at ORDINARY tax rates if held for
less than one year. She doesn't appear to have met the basic
requirements for gain exclusion, since she has not owned the
property for at least two of the past five years, and her
reason for selling early does not meet any of those
allowable for pro-rated exclusion.
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