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Tax breaks on kids' college house?
Dear Tax Talk:
I purchased a home for my children to live
in while they attended college. We also rented rooms to other students
to help pay the mortgage. When we sell in a year, are there any
capital gains exclusions that would work for us?
John
Dear John:
Assuming you purchased the home in your name and not that of
your children, you obviously don't qualify for the exclusion on
the sale of your primary residence.
If you bought the house in the name of your children
and they sell the property, the exclusion may be iffy at best.
Generally, for purposes of claiming dependents, children
temporarily away while attending school are treated as still residing
in your home. This probably means that the school house would not
be considered their primary residence for purposes of the exclusion.
However, take comfort in the fact that the capital
gains rates were recently cut to 15 percent or lower depending
on your income level.
-- Posted: June 25, 2003
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