My wife and I are considering selling a beach house we have owned for 4 years. In that time it has appreciated a fair amount so we'd like to minimize the tax implications to the extent possible. As I understand it, if we simply sell it and don't buy another property, we will have to pay taxes on the gains. At this time I don't believe we will purchase another property but if we did, it probably not be a rental property. What I'd really like to do is apply the proceeds to our primary residence as it is an older home which needs a fair amout of renovation as well as an addition. Is there any way to do this? We currently account for the beach house as a rental property and not a second home (schedule E). If it were a second home, would we be able to do what I'd like to do? How long does a rental home have to be off the market as a rental before it can be considered a second home? Thanks for any advice.
Mike
-- Mike Walsh - mike_walsh at mindspring.com
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