How do you turn a second home into a primary home?
My husband and I sold our primary Home this year, but still own another house in a different state. We are now renting in the city of our primary home, but would like our second home to be considered our primary for capital gains reasons. I spend at least 50 % of my time at our second (now only) home. What do we need to do to make our 2nd home our primary?
Consult a tax professional. Residency is a big issue for the tax guys, as so many try to claim they live in state-income-tax-free states like Florida.
You will likely need to start keeping a detailed log book of when you were actually living in which place. You need 183 days in your home to consider it your primary residence. But, to qualify for the exemption, you may need to actually log 2 full years out of the past 5 actually living in that home, so if you’re only there half the year, it may take you 4 of those 5 years just to get 2 full years that actually qualify.
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It’s too complex to just guess. Spending a couple hundred bucks with a tax advisor now could save you thousands and thousands in taxes or penalties if you do it wrong.
You’ll need to become state residents in the state of your new "primary" home.
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Move.
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you just move there I think
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then its primary
You’ve already done it by spending the majority of your time there. It’s the only one you own. It IS your primary home, and the rental in another state doesn’t count. Best of luck.
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Live there or risk a fraud charge!
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make it your permanent address
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Just move there and have all your bills, drivers license changed and credit cards and etc and bank statements sent there. That way you will proof that it is your primary home.
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Consult a tax professional. Residency is a big issue for the tax guys, as so many try to claim they live in state-income-tax-free states like Florida.
You will likely need to start keeping a detailed log book of when you were actually living in which place. You need 183 days in your home to consider it your primary residence. But, to qualify for the exemption, you may need to actually log 2 full years out of the past 5 actually living in that home, so if you’re only there half the year, it may take you 4 of those 5 years just to get 2 full years that actually qualify.
It’s too complex to just guess. Spending a couple hundred bucks with a tax advisor now could save you thousands and thousands in taxes or penalties if you do it wrong.
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10 years in mortgage banking
You need to do two things. Go to the post office and do a change of address to your 2nd home, and then have your mail forwarded to wherever you want it to go. This is enough for tax purposes as long as you can prove that you spend the time there. You will most likely want to refinancce the home as well. Your old loan would have been done as a non owner occupied and would be a higher interest loan. You will save money, and have show your commitment to the home.
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To really make the property your primary residence then you would need to look like that is how you use it. You file taxes there as if you are a resident. You are registered to vote there. You live there and get mail there.
Granted when you do not own any other property is it not that hard to show that it is you home if you do a number of things (like the items suggested above).
Note that the rule says you lived there as your primary residence in 2 out of the prior 5 years if you want the positive tax treatment.
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