Tax Change - Vacation homes

By
Real Estate Broker/Owner with Bob Graham

Tax change for sale of vacation homes


   If you want to avoid prorating the capital gains tax on the sale of your vacation house, better make it your home address before January 1, 2009.  After that, you may not get the full capital-gains tax exclusion of up to $500,000 per couple ($250,000 for singles) that applies to primary homes.   Under new rules passed recently, the exclusion will be prorated by the amount of time you actually used the home as a primary residence. If you owned the home for 10 years, but lived in it only the last two, you would be able to exclude only 20 percent of the profit from the sale of the home.   January 1, 2009 is the starting date for the calculation, so longtime homeowners won't have to worry about the years before that date.  If you bought a beach house in 2000 and moved into it on January 1, 2011, then sell it in 2013 you will get to exclude about half of the capital gain. The home will have been your primary residence for half of the years when the measure was effective.   If you move to your second home before January 1, assuming you lived in your primary residence for two years before that, you will have three years to sell that home and use the full exemption

 

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If you are seeking more information about Pinehurst NC,  call Bob Graham, Coldwell Banker United Realty at (910) 528-1860. Email bobgraham@buypinehurst.com  Go to www.buypinehurst.com for more detailed information about the Pinehurst-Southern Pines area.  You can also access a free search tool that allows you to customize your search.

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