Members of the Maryland Association of Certified Public Accountants are answering readers' tax questions in advance of the April 17 filing deadline.
Can I still claim an exclusion on capital gains on the sale of a home I have lived in for 30 years although I have a second home that is now my principal residence?
If the house you sold was your principal residence for any 24 months out of the past five years, it qualifies for up to a $250,000 capital gains exclusion ($500,000 if married filing jointly). If it was not your principal residence during any part of the past five years, it does not qualify for the exclusion. If it was your principal residence during part of the past five years, but for less than 24 months, you may be eligible for an exclusion prorated based on the number of months the house was your principal residence. The prorated exclusion is allowed if you don't satisfy the 24-month-use test due to a change in place of employment, health or unforeseen circumstances to be described in future regulations.
Richard B. Kierson, CPA, Sheldon Kramer & Associates
The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary.