Real estate tax breaks elusive for some

Home-sale rules tough for partial $250,000 exemption

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DEAR BOB: My fiancé and I live in her condo, which she bought in January 2003. We just signed a contract to buy a house together. It should be finished in September. She will probably earn about $70,000 capital gain on her condo when it is sold. Since she has owned it less than two years, will there be any capital gains tax to pay? – Anthony M. DEAR ANTHONY: Internal Revenue Code 121 allows principal residence sellers up to $250,000 tax-free sales profits (up to $500,000 for a married couple filing jointly). Because you are not married to the condo owner, and you are not on the condo title, only she can only qualify for the basic $250,000 exemption. Purchase Bob Bruss reports online. However, she has not owned and occupied the principal residence condo the required "aggregate" two of the last five years before its sale. But she might be eligible for a partial exemption, based on the circumstances and the number of months of ownership and occupancy. To qualify for a partial p...