"Primary Residence" IRS Definition
Exactly how should I establish my rentals as primary residences before I sell them.
I know I must move back into them for 2 years,but do I need to switch my homestead property exemption, change my adress on 1040 returns register to vote ect. ? What criteria does the IRS use and how can I be sure they will believe me before I sell it and risk paying capital gains on 275k gain?(Which I believe is no gain,just inflation) (See how much better of a house you can buy with the so called gain if you don"t agree )
[ Edited by hibby76 on Date 07/07/2003 ]
Did I miss part of this? I couldn't find any mention of Utah but since I am considering moving back there I will weigh in. what about a 1031 exchange? Sugar house and those properties above 500E have been good.
5 years ago the market was a firecracker and I sold and moved to Oregon. NOw I am looking back to SLC as a buyers market. My Aunt and a friend are some of the top realtors there and say that the repos are a flood now similar to the 80's (early) might be a good time to buy.
You have to have lived in the property for 2 of the last 5 years for it to be considered a primary residence. I don't know what evidence they require when you sell it. You may want to ask your accountant. Anyone?
Thanks guys, I will consider everything you wrote as good help.
You need to live in it 24 of the last 60 months. Don't have to be consecutive.
Mere occupancy when there are multiple residences may not be sufficient. In determining which residence is your "primary", the IRS will consider other actions that a reasonable taxpayer will take in establishing a primary residence, such as:
1. Address where your mail is delivered.
2. Address on your driver's license.
3. Address on your voter's registration.
4. Address you use to qualify for homestead exemption on your property taxes.
5. Address on your car title.
6. Address on your tax returns.
7. Proximity to work.