Agent

Inside capital gains tax law for real estate

Minimum home ownership time just 24 months to claim tax break

DEAR BOB: I am confused about your recent answer to a home seller who wants to add her mother to the title. You said the mother would be eligible for an Internal Revenue Code 121 principal residence sale tax exemption up to $250,000 after only 24 months of ownership and occupancy. How can she qualify with less than 60 months of ownership? – Donald M. DEAR DONALD: Internal Revenue Code 121 is very generous to principal residence sellers. After as little as 24 months of both ownership and occupancy, a home seller can qualify for up to $250,000 tax-free capital gains. That is the situation for the letter writer who plans to add her mother, who will live in the house for 24 months, to the home's title. Both daughter and mother then qualify for $250,000 individual exemptions. Purchase Bob Bruss reports online. However, a husband and wife can qualify for up to $500,000 tax-free principal residence sale profits if they file a joint tax return in the year of home sale. Only one spouse's ...