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by CareyBot

DEAR BOB: Regarding that $250,000 ($500,000 for a married couple filing jointly) home-sale tax break, what about the taxes that would have been due on deferred gains from sales of prior principal residences? My wife and I bought and sold a total of four principal residences over the years, for a total deferred capital gain of about $300,000. Will that amount reduce our $500,000 exemption when we sell our current home? – George F. DEAR GEORGE: The Internal Revenue Code 121 principal residence sale exemption up to $250,000 (up to $500,000 for a qualified married couple filing jointly) applies to both your deferred capital gains from prior home sales (under now-revoked Internal Revenue Code 1034) and your current home's capital gain. Purchase Bob Bruss reports online. Your $300,000 tota...