tag:blogger.com,1999:blog-5465015914589377788.post246105115224668338..comments2024-03-20T09:32:16.592-04:00Comments on Michael James on Money: Making the Most of the Principal Residence ExemptionMichael Jameshttp://www.blogger.com/profile/10362529610470788243noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-5465015914589377788.post-32987424622776415882013-04-24T09:30:07.027-04:002013-04-24T09:30:07.027-04:00Interesting! Usually the government are sticklers ...Interesting! Usually the government are sticklers for claiming things in the years they actually happened. Since house prices don't rise linearly, I had thought they would force you to use a real assessment at the various key dates. I guess it's another example of why it can be valuable to call on the experts for advice when there are big $$$ in taxes to be paid (or avoided.)Bhttp://financialcrooks.comnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-21850207460578653872013-04-23T19:07:45.252-04:002013-04-23T19:07:45.252-04:00@Bet Crooks: According to the authors, there is n...@Bet Crooks: According to the authors, there is no need for an assessment. You just calculate the capital gain in the usual way as though the concept of a principal residence didn't exist and then reduce this gain according to the number of year the residence was and was not your principal residence.<br /><br />To make this more clear, suppose that you buy a house and use it as your principal residence for 10 years and then not your principal residence for 5 more years. You might think that you pay capital gains taxes on the gain over the last 5 years, but this isn't the case. What you actually pay is 1/3 of the gain over the last 15 years. So, there is no need for an assessment after the first 10 years.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-84013805406575921282013-04-23T18:52:04.297-04:002013-04-23T18:52:04.297-04:00Interesting concept. I wonder how you accurately g...Interesting concept. I wonder how you accurately get an assessment, though, for the house value at the time it ceases to be your principal residence. I guess that's where you call in the experts to help.Bet Crookshttp://financialcrooks.comnoreply@blogger.com