Capital Gains Exemption Fractional Ownership
I own a home I've lived in the last 3 years as my primary residence. It's in an area where it would work well as a vacation rental. I'm considering offering a fractional ownership share of it. My questions are as follows:
1) Can I claim the capital gains exemption on the proceeds if I sell a 1/3 share of the home but continue to live in it as my primary residence, occupying it the other 8 months of the year?
2) If so, would my exemption be limited to 1/3 of the $500K limit since that's the portion of the property sold, or would I be able to claim up to the $500K maximum exemption?
Thanks in advance.
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#4 All Forums Contributor
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#4 All Forums Contributor
- CPA, CFP®, PFS
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@David F., yes you can take full 500k now when you sell partial interest.
If you ever sell your remaining interest, you will have already used your full exemption amount.
However, just to offer your primary residence as short term rental doesn’t count as sale of your primary residence. I am not sure if you were actually trying to sale part of your entity to another party or legal entity.
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