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by CareyBot

DEAR BOB: Please help us. We are in declining health and are no longer able to use our vacation home, which we have enjoyed for more than 20 years. But upon consulting our tax adviser, she says we will owe capital gain tax on the approximate $200,000 profit if we sell it. How can we avoid tax? Until the last two or three years, we spent four or five months each year living in our vacation home – Burton S. DEAR BURTON: Sorry. Your tax adviser is correct. Although you clearly meet the ownership test of Internal Revenue Code 121, to claim the exemption up to $500,000, you don't meet the occupancy test of at least 24 months during the five years before the sale of your vacation or second home. Purchase Bob Bruss reports online. More important, it appears this secondary residence was not ...