Re: persfin-digest V5 #23

From: Christy Rohrig <christy@netwiz.net>
Subject: Re: persfin-digest V5 #23
Date: Mon, 15 Jun 1998 11:57:45 -0700

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> I read in a book about the new real estate tax law which states
> that one qualifies for no capital gains tax if a property has been
> one's primary residence for 2 years, and then rented for 3 years
> (actually, sold before that 3 year period is up).  The book seemed
> very clear about this.

> I've heard others say that it must be one's primary residence when
> the house is sold, not a rental.

I can see why you're confused....  It's simple though.  The government changed the
definition of "Primary residence" to be any house that you have lived a total of 2
year out of the last 5 years.  So if you've rented the house for 2.5 years, you
probably qualify.  You will need to recapture the deprication (even if you didn't
take it) and pay capital gains tax on that.  Even with recapture of the
deprication, it's a great deal!

Regards,
- -Christy




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