Tax Tip of the Week
900 N. Kings Highway, Cherry Hill, New Jersey 08034
856.667.4100 ·
215.563.0276 ·
Fax: 856.667.3652
For the week of
June 26, 2000
Your vacation home is not your residence
When you sell your vacation home, it is not given the same
tax treatment as your principal residence. If you spend most of the year at one place, that is your principal residence.
When you sell your principal residence, you will get favorable tax treatment if you meet the ownership and occupancy
tests.
Here are the requirements to get the $500,000 ($250,000 for singles) exclusion:
- You must have owned and used the property as your principal
residence for at least two of the five years prior to the date of sale.
- For married couples, the full $500,000 is available if either
spouse meets the ownership test and both spouses meet the use test.
- You can use the exclusion regardless of your age. You can also use the exclusion for more than one home sale, but you can't use it more than once every two years.
You could qualify your vacation home for this special tax
break by making it your principal residence and meeting the ownership and use tests.
Please contact us. We will assist you with this
and other tax planning matters. We are a growing firm and would also appreciate your referrals. If you have friends
that could benefit from this tax tip, please give them the address to our Internet site. Thanks for stopping by.
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and current tax information.
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without further details and/or professional assistance.
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