1997 Tax Act Q & A

QUESTION:
I own 5 rental properties. Can I move into #1 for 2 years, sell it, and exclude $500,000 of profit? Then can I move into home #2 for 2 years and again exclude $500,000? And again into #3?

ANSWER:
Yes. Over a 10 year period, you can sell 5 properties and exclude $2,500,000 of profit.

1031

The 10/2004 Tax Law changed the rules for sale of a personal residence acquired in a 1031 exchange. The primary residence cannot be sold (tax free) for 5 years after its acquisition. New Section 121(g).

See Depreciation Recapture

For more information, see 1997 Tax Act
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