Janice

[Unregistered]

I have a client who sold a vacation trailer (never rented out) that I didn't know they had. I put it on Sch D. It resulted in a loss, so there was no tax consequence. Because her husband has alzheimers, she wants to sell their main home in the near future, too and I just want to make sure that they will still be eligible for the $500,000 capital gain relief when they sell their main home. The sale of vacation trailer won't interfere with that, will it?

Thanks!

Janice

[Bill Tubbs]

no interference

Nope, the vacation trailer won't interfere with Sec 121 for selling the home. After all, you can only have 1 primary residence.

Bill

[jainen]

You could have two

You could have two primary residences during a five-year lookback period. But they didn't use Section 121 to exclude gain on the trailer. Even if they had shown a small gain, reporting it on Schedule D is an election to not use the exclusion.