Can I avoid taxes on my residence without living there two years?
February 28, 2006
Subject: Home Sale - Capital Gains Question
Date: Wed, 01 Feb 2006
My wife and I live in Maryland. We are looking to sell our current primary residence, which we bought on November 21, 2004. If we sell before that date in 2006, we will not meet the two-year holding period requirement. We also don't have an "unforeseen circumstance" that we are aware of for a partial exclusion.
Our potential gain is $200,000. We don't want to wait until November, but we don't want to pay a tax on the gain. Can you help?
Date: Mon, 06 Feb 2006
I'm not a magician. The law gives a road map on how to qualify to exclude the gain. Unless you can come up with an "unforeseen circumstance" like a change in employment, I suggest that you follow the road map and wait until after November 21, 2006 to sell your current residence.
We have more answers to frequently asked real estate tax questions! We also offer up-to-date information about new tax real estate tax developments in Michael Gray, CPA's Real Estate Tax Letter.
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