How is primary residence determined?

November 29, 2004

Subject:  primary residence tax question
Date:  Fri, 22 Oct 2004
From:  Dale

I have two residences. What amount of time must I live in a residence per year to declare it as my primary residence? Can I write off the interest of both homes?


Date:  Wed, 24 Nov

Hello Dale,

The principal residence is determined based on the facts and circumstances in each case. Usually, the home in which you live for the most days during the year is the principal residence. Other things considered include 1) the taxpayer's place of employment; 2) where the taxpayer's family members live; 3) the address used on the taxpayer's income tax returns, driver's license, auto registration and where the taxpayer is registered to vote; 4) the address the taxpayer's bills are mailed to; 5) where the taxpayer's bank accounts are located; and 6) where the taxpayer attends church and the location of recreational clubs with which the taxpayer is affiliated. (Regulations § 1.121-1(b)(2))

A taxpayer may deduct interest for acquisition indebtedness (up to $1 million) and home equity indebtedness (up to $100,000) for the principal residence and a second residence. (IRC § 163(h)(3))

Good luck!
Mike Gray

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