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Subject:  Home Sale "Tack-on" period Date:  3/25/1999  9:30 AM
Author:  pcross Number:  12857 of 130714

Could someone explain the "tack-on" part of the ownership and use test? For example, in June of 1977, I sold a home I had lived in for five years and in August of 1977, bought another home. I was under the impression that I had to live in my present home until August of 1999 before selling, in order to avoid paying capital gains. I now am being told that if I wanted to sell my house in June (which would probably be more advantageous), I could tack on the less-than-two-year period to my previous five year period, so that if I made a gain on the sale, I still wouldn't have to pay taxes on it. I don't understand -- if this is so, is it a one-time thing? Can one continue to use "tack-on" periods indefinitely? I can't believe the IRS would be so generous. Please help this confused fool!
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