New rules regarding Section 121 exclusion

[JoshinNC]

A very well known, nationally syndicated radio host who specilizes in money matters (Clark Howard) has been giving advice to his callers regarding the new exclusion rules under Section 121. Specifally, he has been claiming that periods of ownership prior to 1/1/09 will be used to calculate the part of the gain that can't be excluded. My reading of the new law is that any owernship period prior to 1/1/09 is still excluded if all parts of 121 are met (except, of course, any depreciation taken or that should have been taken).

I have attached a poll with a question related to this that will help me determine, with some additional research, whether I should call Mr. Howard's show and tell him he's misinformed.

[Bees Knees]

The new code section reads:

`(i) IN GENERAL- The term `period of nonqualified use' means any period (other
than the portion of any period preceding January 1, 2009) during which the property
is not used as the principal residence of the taxpayer or the taxpayer's spouse or
former spouse...

It seems pretty clear to me. Nonqualified use does not include any period prior to January 1, 2009. Another reason not to believe everything you hear on the radio.

[les grans]

"Ownership" prior to 01-01-09 will be included in the denominator of the fraction, while what would be "non-qualified use" prior to 01-01-09 will *not* be included in the numerator. The terminology hasn't settled down yet, and "periods of ownership without use as principal residence" will become - to some of us, but not all - known as "non-qualified use."

[JoshinNC]

Where are you getting this from?

"Ownership" prior to 01-01-09 will be included in the denominator of the fraction, while what would be "non-qualified use" prior to 01-01-09 will *not* be included in the numerator. The terminology hasn't settled down yet, and "periods of ownership without use as principal residence" will become - to some of us, but not all - known as "non-qualified use."

I haven't read anything that would lead me to your explanation. Bees response is more along my line of thinking.