Capital Gains Exclusions

Real Estate

Capital Gains Exclusions

Determining your principal residence according to the IRS for tax purposes if you own more than one home, can be a bit tricky.

The IRS continues to refine the rules.

First of all, principal residence can take many forms: conventional home, condominium, mobile home, house trailer, tenant-stockholder cooperative housing unit—even a boat, as long as it has sleeping, cooking and sanitary facilities, (a bathroom).

The difficulties arise when you split your time between two different properties during a year.

Simply put, the IRS says that your principal residence is the home you own and use as a residence for “a majority of the time during the year.”

But of course, there are other considerations. For instance....

* the location of your property in relation to your place of employment.

* the location where your family members reside.

* the address you use on your federal and state tax returns, driver’s license, automobile registration and voter registration card.

* the mailing address you use predominantly for bills and correspondence.

* the location of your banks.

* the location, believe it or not, of your “religious organizations and recreational clubs.”

Single Family Residences, SFR; Townhomes; Condo;