Posted: Sun Jun 21, 2009 1:09 pm Post subject: Does the $250,000 Capital Gains Tax Exemption apply if I sel
I have 24 acres of land in Maine with one vacation house which I have owned for 9 years. I want to sell 12 acres but not the house. If I move to the home, make it my primary residence for 2 years, and THEN sell about $500,000 of undeveloped land, do I still qualify for the $250,000 exemption from Capital Gains Tax if I am not selling the house? Do I even need to live in the house for 2 years to get the exemption if I've already owned for 9 years the undeveloped land I wish to sell?
In order to be able to claim the capital gains tax exemption, you must have used the property as your primary residence for at least 2 of the last 5 years. It mainly applies to your home, your primary place of residence. Thus, if you do not sell your primary residence and sell only a part of the land you own, I'm afraid you will not be able to qualify for the capital gains tax exemption.
capital gains tax exemption is for sell of House not for land.
Under the Taxpayer Relief Act of 1997, a homeowner can get exemption from capital gains taxes for up to $250,000 in sales profit for single filers and $500,000 in profit for married joint filers. But if you sell the home before meeting the ownership and residency requirements, you owe taxes on any profit.
The two years of residency in the property need not be continuous. One has to meet the tests for both ownership and using the property for different 2 year periods included within the 5 year period ending on the date of sale.
lajdna
