Legal Question in Real Estate Law in New York

capital gains tax primary / rental property

In 1997 I asked IRS if I should convert my primary residence to a rental property while I trained for a new job as a police officer. At that time the correct answer was yes do it but the next year they changed the tax law. I have now worked as a Police Officer for the past 5 years. The rental property has not been rented since october 2002 I am scheduled to close on the house thursday april 3.

I closed on a piece of property at Shelter Island my new job location 2 weeks ago and am having a modular delivered in may. I need the money from the sale of my former primary residence / rental property.

What can I do to limit my taxes


Asked on 3/30/03, 11:40 am

1 Answer from Attorneys
Debra Palazzo Law Offices of Debra Palazzo, LLC

Re: capital gains tax primary / rental property

You would have to show you used the house for 24 mos as Main resid between 4/2/98 and 4/3/03 (closing date). This does not have to be consecutive.If you used the home during periods of vacancies that add up to 24 mos, you can claim the exempion for primary resid.(less depreciation you took). Example: If you moved back in 10/02, that is 5-6 mos there. Need another 18-19 mos. total useage in last 5 yrs.

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Answered on 3/30/03, 2:01 pm


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