Tuesday, September 12, 2006
IRS does have some soft spots- Orangeburg SC
What if having a parent move in with you creates quarters that are too close for comfort...and you are forced to sell your home?
Well, the IRS wants to help - and may even provide a tax break for taking an ailing parent into your home. Let's take a closer look. Under normal circumstances, if you sell your home prior to living in the property for two full years, you are normally subject to pay capital gains on the profit made. There is an exclusion that allows for $500,000 of tax free gain if you are married or half that if you are single - but you must have lived in the home for two of the past five years.
However, according to the IRS, if you take an ailing parent into your home and therefore are forced to sell, you can still get a pro rated tax break, even if you have not been in the home for the full two years.
Well, the IRS wants to help - and may even provide a tax break for taking an ailing parent into your home. Let's take a closer look. Under normal circumstances, if you sell your home prior to living in the property for two full years, you are normally subject to pay capital gains on the profit made. There is an exclusion that allows for $500,000 of tax free gain if you are married or half that if you are single - but you must have lived in the home for two of the past five years.
However, according to the IRS, if you take an ailing parent into your home and therefore are forced to sell, you can still get a pro rated tax break, even if you have not been in the home for the full two years.
