Real estate tax breaks revisited

How can I avoid taxes when selling part-time home?

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DEAR BOB: About five years ago, my wife and I were given a home in Florida. It is now worth about $800,000. We use it four months each winter. If we sell it, and buy another property worth the same amount, is there a capital gain tax to be paid? What is the best way to avoid paying capital gain tax on our sale profit? – Maxwell D. DEAR MAXWELL: Your first step is to determine your adjusted cost basis. If the property was inherited, your stepped-up basis is the property's fair market value on date of decedent's death (or alternate date used by the estate). If the property was a gift, the bad news is your basis is the donor's adjusted cost basis (probably very low). Purchase Bob Bruss reports online. The cost of any capital improvements you added during ownership should be added to your original basis to arrive at your current "adjusted cost basis." Your second step is to determine the property's approximate current market value, such as by a professional appraisal or by checki...