The topic "Own two houses?" inspired me to ask what I thought was a simple question? How does one take the max allowable deduction of $500,000 when selling two homes?
I downloaded and read IRS pub. 523 and confess I still don't get it. To qualify the home must be your primary residence for 2 of the past 5 years, ok. But say I want to sell my primary in NY. I establish residency in NC, say today. Two years down the road can I sell both houses as primary residences?
The IRS pub. says you can only sell a primary residence every 2 years. Does that mean if I sell the NY house 2 years from now, that the clock restarts for the NC house?
My got-rich-quick neighbor sold his old beach house for a zillion dollars and moved inland and built a mansion. Same guy got-poor-quick when he found out last week his capital gains were astonomical. His beach house didn't meet the critera to be a primary residence. Dumb move.