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Author: Unreal62 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121096  
Subject: Capital gains on home sale question Date: 5/31/2001 2:09 PM
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I will try to outline all of the pertinent info, to get
an accurate answer here!

My wife purchased her first house in 1992. She paid
$60,000 for it. She (and later we) lived in it as
her primary residence until Feb, 1997. At that time
we took out a bridge loan on that house and purchased
our current home.

For the past 4 years and 4 months we have been living
in our current home and renting out the original home.
For the past 2 years, we have been renting to my wife's
sister, who hoped to purchase it eventually.

Now, we are in the process of selling the home to another
individual (not a family member). The selling price will
be $89,000. Our selling costs and improvements will total
approximately $7,000.

So, unless there are any mitigating circumstances in the above
information, I figure we are paying Capital Gains on approximately
$22,000 ($89,000-$7,000)-$60,000=$22,000

Anyone see any way around this? Renting to relative help at all?

Finally, since the house was in my wife's name and she makes less
income than I do, should we look into filing separately to reduce
our Capital Gains rate?

Thanks for any and all assistance!

Neal
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