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Any tax specialists out there who can answer this?

By
Real Estate Agent with Dominion Fine Properties SA582226000

I'm hoping someone on this helpful website can help.

I believe there is still the current law that to avoid capital gains, one must retain their primary residence for 2 years.  However, is there any relief for the homeowner who is upside down?

I have a client who bought a home last September for $225,000.  It is now only worth $190,000.  He HATES the neighborhood and wants to move ASAP.  I told him I still thought he had to retain it for at least 2 years, but he's adament he can move in one. With the values now far below what he originally purchased his current home for, there's obviously no gain.  Can he move now with no tax liability?  Can he move after one full year? 

If anyone knows, please let me know.  He'd like an answer today and I can't get hold of my CPA until Monday.

Thank you, in advance.

Juli Vosmik

Scottsdale, AZ

480-710-0739

Posted by

Juli Vosmik

Dominion Real Estate Partners, LLC

480-710-0739

 

 Scottsdale and Cave Creek Real Estate

 

 

Helping you make informed decisions whether buying or selling homes in Scottsdale, Cave Creek and north Phoenix Arizona.  I know the area - I live here.

 

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Comments (1)

Mike Jones
SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) - Tucson, AZ
Mike Jones NMLS 223495

Juli,

I know I'm a day late and a dollar short, but I read your post, and used the Active Rain search function to see what anyone else has written about "tax relief for upside down homeowners."  Here's some of what I found:

Mortgage Forgiveness Act Provides Income Tax Relief To Foreclosed Homeowners

MORTGAGE RELIEF ACT - CHRISTMAS PRESENT TO PRIMARY HOMEOWNERS

Mike in Tucson

May 19, 2010 11:04 PM