Retaining home capital gain exemption after moving out?


S

Salmon Egg

After not being able to drive, I moved from my home to an "independent
living facility." My wife remained in our home. Although I am
"independent" in the sense of not having any personal care given to me
for daily functioning, I still rely upon the facility to provide food,
medical transportation, and other such services that would otherwise be
difficult to obtain. I can get around by public transportation. It would
be very difficult to function if I remained in my home. Moreover, much
of my accumulation of stuff is still at the home.

My wife may soon need similar services and maybe some personal care as
well. Under those circumstances, it would make sense to sell the home.
Am I going to lose my portion of the capital gain exemption if that is
long-delayed? Is there any useful strategy to follow in order to retain
that exemption?

--

Sam

Conservatives are against Darwinism but for natural selection.
Liberals are for Darwinism but totally against any selection.
 
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A

Alan

After not being able to drive, I moved from my home to an "independent
living facility." My wife remained in our home. Although I am
"independent" in the sense of not having any personal care given to me
for daily functioning, I still rely upon the facility to provide food,
medical transportation, and other such services that would otherwise be
difficult to obtain. I can get around by public transportation. It would
be very difficult to function if I remained in my home. Moreover, much
of my accumulation of stuff is still at the home.

My wife may soon need similar services and maybe some personal care as
well. Under those circumstances, it would make sense to sell the home.
Am I going to lose my portion of the capital gain exemption if that is
long-delayed? Is there any useful strategy to follow in order to retain
that exemption?
You asked a very similar question back in November. You got a reply by
Stuart Bronstein that I corrected as Stuart had misinterpreted one part
of the law.

If you want the $500K exclusion one of you must meet the ownership rule
and both of you must meet the use rule. If "you" can't come up with the
two out of five year use test, then you can't get the $500K exclusion.
If you have some use (less than two years but more than zero use) and
the reason is health driven, you may get a partial exclusion.

See the November posts (Subject was: Retaining homeowner capital gain
exclusion) and IRS Pub 523.
 
S

Salmon Egg

Alan said:
You asked a very similar question back in November. You got a reply by
Stuart Bronstein that I corrected as Stuart had misinterpreted one part
of the law.

If you want the $500K exclusion one of you must meet the ownership rule
and both of you must meet the use rule. If "you" can't come up with the
two out of five year use test, then you can't get the $500K exclusion.
[If you have some use (less than two years but more than zero use) and
the reason is health driven, you may get a partial exclusion.]

See the November posts (Subject was: Retaining homeowner capital gain
exclusion) and IRS Pub 523.
I do remember my posting such a question. I do not remember the answer
being so clearer. The two lines in [] brackets do make it clearer.

--

Sam

Conservatives are against Darwinism but for natural selection.
Liberals are for Darwinism but totally against any selection.
 
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A

Arthur Kamlet

You asked a very similar question back in November. You got a reply by
Stuart Bronstein that I corrected as Stuart had misinterpreted one part
of the law.

If you want the $500K exclusion one of you must meet the ownership rule
and both of you must meet the use rule. If "you" can't come up with the
two out of five year use test, then you can't get the $500K exclusion.
If you have some use (less than two years but more than zero use) and
the reason is health driven, you may get a partial exclusion.



In addition to the health reasons, certain "Unforeseen Circumstances"
may allow a lowered exclusion amount.
 

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