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House Hopper May Suffer Under New Tax Rules!!!!
Life is getting tougher for some people who own more than one home.
Part of the housing-stimulus package signed into law last week by President George W. Bush could reduce -- though not eliminate -- the appeal of a tax-saving strategy used by wealthy home-hoppers.
While the new law won't affect the vast majority of the nation's homeowners, it will likely affect some people planning to sell their primary residence, claim the full home-sale exclusion to pay little or no capital-gains taxes -- and then move to a second or third home they've owned for some time, convert it into their primary residence, sell it and once again pay little or no capital-gains tax.
Under both the old and new law, most homeowners can sell their primary residence and exclude as much as $250,000 of the gain if they're single, or as much as $500,000 if they're married and filing jointly with their spouse. To qualify for the full exclusion, owners typically must have owned the home and used it as their primary residence for at least two of the five years prior to the sale.
But under the new law, which takes effect next year, many owners might not be ... more
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