I suggest contacting an attorney as to your legal rights to ownership of the property as the Life Estate "Remainderman."
Under the new rules, anyone can completely exclude up to $500,000 of gain on a joint return ($250,000 if filing singly). The gain does not roll over. Since the gain does not roll over, neither do the expenses and you do not need a lifetime of records. You do not need to be 55 to take advantage of the exclusion. There are new rules and limits to watch.
What are the Limits? You must sell your personal residence after May 6, 1997. “Sell” means settle.
You must own and occupy the property as your personal residence for at least two of the five years preceding the sale. The two years do not need to be continuous so long as the total periods aggregate two years or more. You could occupy for six months each year for four years to total your two years of occupancy.
Partial Exclusions The new law recognizes a partial exclusion if you fail to meet the two year use and ownership requirement or if you must sell more than once in two years. For instance, if you only used the property as your personal residence for one year instead of two, you could exclude half the amount of gain. The partial exclusion is only available if you sold due to change in your place of employment, health or to the “extent provided in regulations, unforeseen circumstances.”
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
