Homesteading Vacation Property
REM # A767
By Ilyce R. Glink
Summary: A ThinkGlink reader has moved into his vacation property and hopes to avoid capital gains tax when selling the property. Ilyce explains how homesteading works and suggests checking with the IRS.
Q: I just homesteaded my lake home that I have owned for five years. In June
I sold my primary residence. After two years, can I sell my lake home and avoid
paying capital gains tax?
A: If your lake home has become your primary residence, and you want to keep
up to $250,000 in profits tax free (up to $500,000 if you're married), you should
wait 24 months after the date you closed on the sale of your prior primary residence
to sell the lake property.
For more details, please check out IRS publication 523, "Selling
Your Home," for more details.
NOTE: This column is distributed by Real Estate Matters Syndicate, PO Box 366, Glencoe, Illinois, 60022. This column may not be resold, reprinted, resyndicated or redistributed without written permission from the publisher.
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