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My father who just turned 100 lived in his home since 1967.

In Dec of 2008 he...
My father who just turned 100 lived in his home since 1967. In Dec of 2008 he broke his hip and has never returned to that residence. He lived with me for 2 yrs and was then placed in an assisted living center in April of 2011 where he still lives. His home will now be sold as of Oct 1 of this year. My question is: does he qualify and meet the ownership test for the capital gains exclusion. Thanks, Dale
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8/25/2013
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,592
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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MyVirtualCPA :

Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.

MyVirtualCPA :

How are you today?

MyVirtualCPA :

Unfortunately, based on your explanation your father would not qualify for a capital gains exclusion for a primary residence

MyVirtualCPA :

There are exceptions that allow a reduced exclusion due to the sale of a home for health reasons - but the computation of the exclusion allows you to exclude the portion of the time that you lived in the house. For example, if you lived in the house 1 out of 5 years you would get 1/2 of the exclusion.

MyVirtualCPA :

But, as your father has lived there 0/5 years there would be no exclusion

MyVirtualCPA :

I'm truly sorry that this is not favorable in your situation. When rating, please rate based on my professional answer and not how the answer made you feel. I am penalized personally for negative ratings, so I would be punished for my honesty

MyVirtualCPA :

I hope your father is doing well, and I hope you have a great rest of the day this lovely day

MyVirtualCPA :

Please respond and let me know if I have provided you with excellent service

Customer:

Hi, Dale here. Is this information from Web Site www.Nolo.com under (Nursing Home Stays) correct, or am I reading it wrong. Quote: time spent in the nursing home still counts toward ownership time and use of the residence. For example, if you lived in a house for a year, and then spent the next 5 in a nursing home before selling the home, the full exclusion would be available. After reading this I thought I should get a qualified answer to Dads situation.

MyVirtualCPA :

Thanks for your follow up. Unfortunately, in this situation your father moved into your house and then into the nursing home. In my opinion, your father did not move from his house directly into a nursing home. It's a grey area, but since he first moved out in 2008 I do not believe it would apply

Customer:

Ok, Thanks.

MyVirtualCPA :

You're welcome. Have I provided you with excellent service today?

Customer:

Yes but cant rate your service at the bottom! It keeps saying your Expert has not finished answering.

MyVirtualCPA :

Yes you can now I'm sorry I wanted to make sure you were satisfied before I allowed you to rate

Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,592
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Megan C
Megan C, Certified Public Accountant (CPA)
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