Defining Principal Residence: Its Your Home!
Sunday Jul 05th, 2020
In order to take advantage of the up-to-$500,000 exclusion of gain (or up-to-$250,000 if you file a tax return as a single taxpayer) the house you sell has to be your "principal residence". Under most circumstances, we do not need a legal definition of this concept. "This is my house, and I have lived here for many years; what's the problem."
But as we all know, life is often not that simple. And, unfortunately, there is no definition provided in the Tax Code.
Even the Internal Revenue Service has admitted that "whether or not property is used by the taxpayer as his principal residence.... depends on all the facts and circumstances in each case, including the good faith of the taxpayer" . . . Read More about Defining Principal Residence: Its Your Home!
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