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Can I avoid or reduce capital gains on the sale of my summer home?

February 28, 2006


From:  Dave
Date:  Thu, 02 Feb 2006

I sold my mobile home in Florida after owning it 27 years. My primary residence is in Michigan. Can I avoid the capital gains tax or reduce it? We used the Florida home about 5 months out of the year.

Thanks, Dave

Answer

Date:  Mon, 06 Feb 2006

Hello Dave,

Whether the residence qualifies for an exclusion is a question of fact. The facts you have given to me donít meet the requirements. If you had asked before the sale, we might have discussed setting up an installment sale or something. Now you have to deal with the consequences of your actions. If you sold the property during 2006, look for any items you might own that could generate a capital loss to offset the gain. The most ideal item would be a "loser" stock that you can sell.

Good luck!
Mike Gray

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IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained on this website was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.

Can I avoid or reduce capital gains on the sale of my summer home?

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