Remember the good ole days when you could convert your rental property or vacation home to a principal residence and then use the full $250,000/$500,000 home-sale exclusion? Not anymore.
Today, you must divide your period of home ownership into two categories—qualified and nonqualified use:
Qualified Use-is the time you or your spouse uses the home as your principal residence.
- Nonqualified Use-is any time after January 1, 2009, in which neither you nor your spouse uses the property as a primary residence.
However, there is one important exception to the nonqualified use definition. Contact me for details.
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