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Primary Residence and the Section 121 Exclusion

  • 1.  Primary Residence and the Section 121 Exclusion

    Silver Most Valuable Member
    Posted 06-24-2019 12:16
    Married taxpayer who has retired wants to move his primary residence to upstate NY while still maintaining residence in Wantagh, NY for spouse who hasn't retired.

    If they sell the house in Wantagh in 6 years, do they jeopardize his $250,000 exclusion as his residence is now considered upstate?

    Gotta love these questions sometimes.

    Alfonso J. Mollica CPA

  • 2.  RE: Primary Residence and the Section 121 Exclusion

    Posted 06-25-2019 09:58

    To recap your scenario: Wife still qualifies for the $250,000 exclusion on the anticipated Wantagh sale because it is still her primary residence.  Husband can no longer take the $250,000 for the Wantagh house because his primary residence is upstate.


    However, I would maintain the husband never changed his primary residence, he simply took advantage of his retirement and spends more time in their vacation home.  I'd instruct him to keep his primary address in Wantagh, vote in Wantagh, keep his driver's license address there, and visit often.   Also, keep social contacts in Wantagh, church/temple memberships, etc.


    Note Primary residence is not based on a count of days spent in any location, your 'domicile' is where your heart and home are.  Keeping a wife and residence in Wantagh, and frequently returning, indicates his heart is still in Wantagh.   NY State often goes after Florida residents that keep their NY home with similar reasoning, and they usually win.


    Vacationing a lot when you are retired does not necessarily change your primary residence.





    Donald W. Rifkin, CPA, CFP, PC

    1 University Plaza, Suite 108

    Hackensack, NJ 07601

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  • 3.  RE: Primary Residence and the Section 121 Exclusion

    Silver Most Valuable Member
    Posted 06-25-2019 10:09
    Thank you for your response. What I didn't explain is that he wants to move all his mail and his drivers license up there for purposes of hunting license and other things.

    Alfonso J. Mollica CPA

    Alfonso J. Mollica CPA, P.C.

    Thank you.

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  • 4.  RE: Primary Residence and the Section 121 Exclusion

    Posted 06-25-2019 10:18

    That could be a very expensive hunting license and very expensive mail to go with it.