Subject:  Tax deductible question
From:  Janet
Date:  Fri, 16 Sep 2005

Does raw land count as my primary residence? I live on it and my mail is delivered there. There is no structure and I will live in a tent until I build.

Thank you,
Janet

Answer

Date:  Fri, 07 Oct 2005

Hello Janet,

According to the IRS's regulations, vacant land won't qualify for the exclusion for the sale of a principal residence unless the land is adjacent to land containing the dwelling unit of the taxpayer's principal residence. (Reg. Section 1.121-1(b)(3).) You might be able to challenge this regulation with your facts, because the requirement isn't in the Internal Revenue Code.

The determination of principal residence is made based on facts and circumstances. Your "home" may be treated as your residence for purposes other than the sale of residence rules, such as for business traveling expenses.

Good luck!
Mike Gray

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