Agent

Key to avoid tax on sale of apartment building

Owners who occupy unit need special appraisal, exchange

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DEAR BOB: My husband and I own a three-unit apartment building. We live in one of the apartments. We're planning to sell and buy a single-family house as our residence. What are the tax implications if we buy a house for more than what we sell the building for or if the new house costs less than the current building? --Jane D. DEAR JANE: The purchase price of your personal residence house is irrelevant. You don't need to buy another replacement principal residence to avoid capital gains tax. Purchase Bob Bruss reports online. You can use the Internal Revenue Code 121 principal residence sale tax exemption up to $250,000 (up to $500,000 for a qualified married couple filing a joint tax return) for the profit from the sale of your personal residence apartment. To determine this amount, before the building sale closes, you should obtain a professional appraisal to allocate the sales price between the two rental apartments and your personal residence unit. But the only way to avoid capital...