Agent

How renting home each year impacts $250K tax break

Principal-residence rule worries some

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DEAR BOB: I sold my principal residence and moved into my vacation home, which is now my permanent principal residence. However, I go to Florida four weeks each winter. During that time, I rent my home out for a little extra income. When I decide to sell, will that four-week annual rental period prevent me from claiming the house as my principal residence for the $250,000 tax-free exemption? --Dianna S. DEAR DIANNA: No. Your short-term, four-week annual rental doesn't prevent you from selling your principal residence and claiming your $250,000 tax-free exemption, as allowed by Internal Revenue Code 121. Purchase Bob Bruss reports online. Of course, that presumes you own and occupy it as your primary home at least 24 of the last 60 months before the sale. Also, you cannot use IRC 121 more frequently than once every 24 months. For more details, please consult your tax adviser. SHOULD LANDLORD COLLECT BIG DEPOSIT OR LAST MONTH'S RENT? DEAR BOB: I am a new landlord who is receiving co...