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Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
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Experience:  Extensive Experience with Tax, Financial & Estate Issues
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Question is related to Capital gains/residency I have owned

Customer Question

Question is related to Capital gains/residency
I have owned home in Vermont for 30 years (since 1986) and have not owned any other property.
I was "down-sized" during 2007-2008 depression and not able to find commensurate job in VT. so moved to Virginia and then to South Carolina. My main goal has been to keep the house 1st to see if adult children wanted it, and 2) to then sell it (put on the market June, 2013). Now I have a P & S agreement.
The house has been half and half, empty and with some years some caretakers (with caretaker language) to keep the 1861 house going (hard winters). The caretakers paid nominal $$ to live there, i.e. 1/3 to 1/2 of actual mortgage amount. It was never my intent to "rent to make money" and never, ever gained any $$ from the home.
Over the years, I have made substantial improvements which amount to much more than the gain I receive from the sale.
Can you advise on if I qualify for capital gains offset for either state or federal taxes?
Thank you.
Submitted: 10 months ago.
Category: Tax
Expert:  Stephen G. replied 10 months ago.

Well, first of all, if as you say:

"I have made substantial improvements which amount to much more than the gain I receive from the sale", then there is no capital gain to be concerned about?

However, if that isn't what you actually mean, and there is a capital gain involved, then in order to qualify for the exclusion ($250,000 if single or $500,000 if married filing a joint return), you would have to have owned and lived in the home as your principal residence for any 2 out of the previous 5 years ending on the date of sale in order to qualify for the exclusion.

There is no other exclusion available due to reinvestment of the sale proceeds, etc. as there has been in the past. There are certain exceptions to the 2 year requirement, but not the 5 year exception period. From your explanation of the time period involved, it sounds live you will not have occupied the property as your principal residence for any part of the 5 year period?

Perhaps you can clarify the time periods involved and whether or not you expect to actually have a capital gain or not from the sale of the property.

Expert:  Stephen G. replied 10 months ago.

Just checking in....................

I see that you have had a chance to view my response. Do you have any follow-up questions or may I assist you further?

If not, please remember to rate my response as that is the only way I will receive my share of the payment you already made to the site.

Thanks very much,

Steve G.

Expert:  Stephen G. replied 8 months ago.

Just checking in...In reviewing my "open" questions, I see that you have viewed my previous comments but have not provided a rating for me.

Is there something else I can do to satisfy you, or may I clarify anything with respect to your question?

Despite the extended time following your question & my response, I would be happy to clarify anything for you or to answer any follow-up questions you may have.

If you don't have any additional questions or comments, then I would appreciate it if you would provide a rating so that I may close out your question favorably & receive my share of the payment you made some time ago.

Thanks very much,

Steve G.

Expert:  Stephen G. replied 7 months ago.

Did you by any chance experience problems with the rating system? I ask as around the time of your question the site was having some issues in this regard and some of the ratings weren't credit to us. If that was an issue with you, perhaps you could just indicate your rating in words, hopefully good, very good or excellent. If you would take a moment to do that, customer service with credit me with responding to you and close out the question favorably.

Thanks very much,

Steve G.

Expert:  Stephen G. replied 7 months ago.

Just checking in.....................

I'd like to close out this question before the end of the month, if possible.

I would appreciate it if you would take a moment to let me know if I can assist you further and/or if you would provide a rating for my responses as indicated above.

Thanks again,

Steve G.

Expert:  Stephen G. replied 7 months ago.

Deborah:

Just checking in.....................

I'd like to close out this question before the end of the month, if possible.

I would appreciate it if you would take a moment to let me know if I can assist you further and/or if you would provide a rating for my responses as indicated above.

Thanks again,

Steve G.

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