principal residence

Main Home

The place where one lives most of the time. The main home is important to persons who own multiple properties because vacation homes and investment properties are taxed differently than the main home. In particular, one is not required to pay capital gains tax on the sale of a main home, provided one then buys another main home of equal or greater value. A main home is also called a principal residence.

principal residence

The place one declares as his or her primary domicile;the address used on a driver's license,for voting,and for income taxes.The choice of a principal residence can make a difference regarding liability for income taxes, estate taxes, creditors' rights, homestead exemptions, and other such legal and economic consequences.

Principal Residence

A principal residence is generally the home in which a taxoayer lives most of the time. A taxpayer who sells a principal residence that he or she owned and lived in for at least two years in the five-year period ending on the date of sale may be able to exclude up to $250,000 ($500,000 on a joint return if both spouses used the home as a principal residence for the required time) of gain from the sale. A taxpayer can have only one principal residence at any time. A principal residence can be a home, condominium, cooperative apartment, townhouse, mobile home, or houseboat.
References in periodicals archive ?
For the years after 1981, each married or common law couple may only designate one housing unit as their principal residence in a given year.
Further, the first use of the above improvements must begin with the taxpayer, and such improvements must be installed in a home which is owned by the taxpayer and used as the taxpayer's principal residence, and such home must be located in the U.
If your principal residence has appreciated in value beyond the $500,000 gain exclusion provided under Section 121 of the IRS code, are you stuck paying taxes on the profits over $500,000?
Prior to changes made under the Taxpayer Relief Act of 1997 (TRA 1997), taxpayers were allowed to defer recognition of gain on the sale of their principal residence under Section 1034, provided they reinvested the proceeds from the sale in another residence.
The new rules also will give needed relief to the spouse (or ex-spouse) who has vacated the principal residence but has not yet sold his or her interest.
The Puerto Rico Fixed Income Fund's Principal Protected Notes may be purchased by or transferred exclusively to individuals having their principal residence within the Commonwealth of Puerto Rico and to persons, other than individuals, organized under the laws of Puerto Rico and whose principal office and principal place of business are located within the Commonwealth of Puerto Rico.
A house that a married couple continued to use while trying to sell it was their principal residence during that period; therefore, they did not meet the timing requirement to qualify for an $8,000 first-time homebuyer credit when they purchased a new house, the Tax Court held.
108(a)(1)(E) excludes from gross income qualified principal residence indebtedness discharged after 2006 and before January 1, 2013.
Under this new law, an individual taxpayer who is a first-time homebuyer of a principal residence in the United States is allowed a refundable tax credit equal to the lesser of:
Under this provision, an exchanger who performs an IRC [section] 1031 tax deferred exchange into a rental house as replacement property, which is later converted into the exchanger's principal residence, is not allowed to exclude gain under the principal residence exclusion rules of IRC [section 121 unless the sale occurs at least five years after the closing date of the replacement property purchase.
The amount of the reduction is equal to the proportion of the capital gain that is attributable to years that the property is designated as a principal residence relative to the total number of years the property was owned; i.
The Taxpayer Relief Act of 1997 allows taxpayers to exclude up to $250,000 of gain ($500,000 for married couples filing a joint return) realized on the sale or exchange of a principal residence occurring after May 6, 1997.

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