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

To: gpowell who wrote (42547)	10/4/2005 12:17:07 AM
From: David Jones	Respond to of 306849

>>>>"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." <<<< Oh that can be a killer. That's exactly what I'm living in now but purchased in 98. One can't exchange income property to a residence unless one rents the target property for x time. It's a gray area, as far as I know, how long the target property has to be income property before one can declare it one's residence. But that Act of 2004 I wasn't aware of and it's good to know thank you.