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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: GraceZ who wrote (42541)	10/3/2005 5:56:32 PM
From: Live2Sail	Read Replies (2) \| Respond to of 306849

Grace, I think you bring up a good point in that people don't necessarily understand the tax consequences of their actions wrt real estate, particularly the neophytes. I don't think that they can move back to their old place as they are now 5 instead of 3. However, their property taxes would also go up. In their case, I don't know if would have been a huge difference because they haven't owned their original place for more than six years, I suspect. Good ol' prop. 13 . Let me also add that I do appreciate your input on the board. L2S

To: GraceZ who wrote (42541)	10/3/2005 8:40:50 PM
From: gpowell	Read Replies (2) \| Respond to of 306849

This might apply: "Sale of Personal Residence Acquired in a Like-kind Exchange — Taxpayers who convert rental property to a principal residence should know that a tax law change may limit their ability to exclude gain on the sale of that residence if they obtained the property through a like-kind exchange. Generally, a taxpayer can exclude up to $250,000 of gain on the sale of a home, provided the individual has owned and used it as a principal residence for two out of the five years before the sale. The exclusion is $500,000 for a married couple if both meet the use test. The American Jobs Creation Act of 2004 does not allow any exclusion if the taxpayer sells the home within five years of acquiring the property through a like-kind exchange. The new law applies to sales after October 22, 2004." irs.gov

To: GraceZ who wrote (42541)	10/3/2005 11:08:10 PM
From: David Jones	Read Replies (1) \| Respond to of 306849

>>>They can get around the big tax hit when they sell if they move back in (need to live in it 2 years out of 5) before they sell it or do a like exchange to another rental property.<<<< If they've been in their first home five years. Then don't they have three years after they moved out to still take the 250/500 with adjustments for the income and expenses from their x home used as a rental?