Time Spent Living On My Property
I began building a custom home in 2001. I was living on the property as I was building my home. I received the CofO on Oct. 2003. I lived in the home for one year after receiving my CofO. I now plan on selling. For capitol gains purposes - can I include the time I spent living on the property while building? Or does the clock start ticking after I received the CofO?
Thanks for any input.
Can't anybody help me? maybe make a suggestion where i can look for an answer to this question.
In what way did you live on the property before there was a house on it?
The rule is primary residence 2 of the last 5 years. If you had no other building that might qualify I suppose a tent on the vacant land could qualify as primary residence.
My guess is if this was the only property you were living in, that would be your primary residence from 2001 on. However if you had another house that you used itemized deductions (interest, taxes) in year 2001-2004 that would raise a red flag. Establishing proof of residency ie. drivers license, tax returns etc with the address of the property in question is a good idea.
I lived in a trailer on the property. There was no other residence during those years. This was where I lived, where all my mail came to. My tax returns, drivers licence all have that address. It sounds like I can call this my primary residence. What your saying is the CofO has nothing to do with it.
aw shucks, I was hoping for a tent somehow.
To get capital gain treatment on any capital asset, you only have to own it for more than a year, not occupy it. When it comes to construction, the part of the house completed more than one year before sale would get long-term gain treatment. The part completed less than a year before sale would get short term gain treatment.
You might be referring to the exclusion of gain on a primary residence.
The exclusion rules are specific to a particular dwelling. So, even if the trailer does qualify as a residence, the clock would start again when you move into the house. You would need to occupy the house as your primary residence for 2 years to exclude the gain.
Is it a rental or your primary residence?