Registered: Apr 2005
Local time: 05:51 PM
Location: Clifton NJ
My wife inherited our first house about eight years ago. At that time our accountant informed us we were exempt from capital gains. He indicated it had to be our primary resident for at least two years.
We are superintendents of a 24 unit apartment building for 18 years. It?s imperative that I live at my part time job, so we figured some of her mail was going directly to her house and that was enough proof.
In our minds it was our primary residents, it?s five minutes away and we enjoyed our home. Are children enjoyed their first backyard, we took care of the place just like we would, sweat equity , bought groceries, purchased pool and property supplies.
We had so much time moving in slowly, we wanted our kid?s to finish school without disrupting them. But we realized we were strangling for eight years maintaining and paying the bills.
In December of 2003 we decided to sell. We had plenty of time moving out, borrowed a truck from work. By April of 2004 it was sold.
A rude awakening, we had to pay capital gains. Don?t get me wrong, I count my blessings every day. We talked to our accountant who indicated that with full discloser and explain about my part time job, moving in expenses etc. It required the landlords tax form (forgot the code number) I think W2 he paid me as an employee at his Pharmacy and in addition (bartering) rent and utilities free. Note, estimated value for rent was never counted. This was very important to my accountant as it was required by law. I did not want to open a can of worms so to speak and left well enough alone.
Also if something was over looked and found out later, like a year or two that we were not to pay the capital gains, would we get a refund or maybe be qualified for a percentage of the capital gains refunded?