Agent

Partial real estate tax break granted for the right reasons

Some owners can't hold out 2 years before selling
Published on Oct 30, 2006

DEAR BOB: If my partner and I sell our jointly owned home, will we owe capital gains tax if we sell before owning it for two years? We will probably each make about $50,000 profit --Gina B. DEAR GINA: The fact you are not married to each other is irrelevant. What matters is both names are on the title to your principal residence, and you are selling before owning and occupying it at least 24 of the last 60 months before its sale. Purchase Bob Bruss reports online. If you can meet that test, Internal Revenue Code 121 provides up to $250,000 tax-free capital gains for each co-owner. However, IRC 121 specifies if the reason for the principal-residence sale after less than 24 months of ownership and occupancy is a health reason, change of employment location qualifying for the moving-cost tax deduction, or "unforeseen circumstances," each qualified co-owner might be eligible for a partial deduction. To illustrate, suppose the reason for selling your home is change of employment location ...

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