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Subject Author Date
capital gain question zoogles 03-31-2007
Posted by zoogles on March 31, 2007, 9:55 pm
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 I have a question I hope some of you can help me out with.
Okay here's the situation. My mom has lived in her primary
residence from 1986 until this last Nov (06) at which time
she got married. My stepfather has also lived in a separate
home as his primary residence for about the past 15 years
(which they both now live in). If they were both to sell
each of their homes around the same time, would they have to
pay capital gains? Their tax accountant told them they'd
have to wait to sell one for two years, but they each lived
in the homes for over two of the past five years, weren't
married up until Nov. 06, couldn't they each exclude up to
250,000 since they had seperately owned them and weren't
married at the time if they were to sell now?

Thanks!

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Posted by Phil Marti on April 2, 2007, 5:58 pm
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> I have a question I hope some of you can help me out with.
> Okay here's the situation. My mom has lived in her primary
> residence from 1986 until this last Nov (06) at which time
> she got married. My stepfather has also lived in a separate
> home as his primary residence for about the past 15 years
> (which they both now live in). If they were both to sell
> each of their homes around the same time, would they have to
> pay capital gains?

Since you don't give us any numbers, "maybe."

If she sells her old home by September 2009 she will qualify
for a $250,000 exclusion of gain.

If he sells their current home at any time he is entitled to
a $250,000 exclusion of gain.

Since she's already living in "his" home, 2 years after she
sells her old home he could sell their current home and
exclude $500,000 of gain on a joint return.

All this is covered in IRS Publication 523.

--
Phil Marti
Clarksburg, MD

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

Posted by Stuart A. Bronstein on April 3, 2007, 1:48 am
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>> I have a question I hope some of you can help me out with.
>> Okay here's the situation. My mom has lived in her primary
>> residence from 1986 until this last Nov (06) at which time
>> she got married. My stepfather has also lived in a separate
>> home as his primary residence for about the past 15 years
>> (which they both now live in). If they were both to sell
>> each of their homes around the same time, would they have to
>> pay capital gains?

> Since you don't give us any numbers, "maybe."
>
> If she sells her old home by September 2009 she will qualify
> for a $250,000 exclusion of gain.
>
> If he sells their current home at any time he is entitled to
> a $250,000 exclusion of gain.
>
> Since she's already living in "his" home, 2 years after she
> sells her old home he could sell their current home and
> exclude $500,000 of gain on a joint return.

I suspect the last point was her issue. If she sells her
home and they file joint returns, no exclusion will be
allowed on the sale of the second home until two years after
the sale of the first one.

Stu

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

Posted by Phil Marti on April 3, 2007, 6:44 pm
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> I suspect the last point was her issue. If she sells her
> home and they file joint returns, no exclusion will be
> allowed on the sale of the second home until two years after
> the sale of the first one.

That's the only way to get a $500,000 exclusion, but he
would still be entitled to a $250,000 exclusion at any time
and with any filing status.

--
Phil Marti
Clarksburg, MD

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

Posted by Stuart A. Bronstein on April 4, 2007, 2:20 pm
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>> I suspect the last point was her issue. If she sells her
>> home and they file joint returns, no exclusion will be
>> allowed on the sale of the second home until two years after
>> the sale of the first one.

> That's the only way to get a $500,000 exclusion, but he
> would still be entitled to a $250,000 exclusion at any time
> and with any filing status.

Ok, thanks. I misread the statute.

Stu

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

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