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Housing residency question
Old 04-30-2007, 12:38 PM   #1
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Housing residency question

A person I know had a question regarding a house that they used for vacation. Currently they rent because of their job location and use the house throughout the year for vacation. If they were to sell it they would not get the 500000 housing deduction? I'm making sure I gave them the right answer
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Re: Housing residency question
Old 04-30-2007, 12:42 PM   #2
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Re: Housing residency question

If it has been their primary residence for 2 out of the last 5 years (dont have to be consecutive years) then yes they would qualify for the break. If not than no they wouldn't.
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Re: Housing residency question
Old 04-30-2007, 12:57 PM   #3
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Re: Housing residency question

Thanks, just wanted to make sure.
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Re: Housing residency question
Old 04-30-2007, 01:06 PM   #4
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Re: Housing residency question

Yes they get the $500,000 exclusion, but to the extent they took (or should have taken) depreciation on the property while it was rented, they will have to pay a recapture tax on that depreciation. Probably not a big bill in this case.
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Re: Housing residency question
Old 04-30-2007, 01:11 PM   #5
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Re: Housing residency question

Well they do not rent the property out. They did not want the hassle of it. If Im understanding you correctly Martha. They are renting an apartment while their house is too far away from their jobs.
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Re: Housing residency question
Old 04-30-2007, 01:14 PM   #6
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Re: Housing residency question

Sorry. I misunderstood. They are good to go with the exclusion.
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