Housing Assistance Act of 2008 May Affect Persons Wanting to 1031

How does this change affect §1031 tax deferred exchange planning? Suppose a single taxpayer

exchanges into a rental property which is rented for four (4) years, and then moves

into this former property and lives in it for two (2) years as a principal residence. The taxpayer

then sells the principal residence and realizes $300,000 of gain. Under prior tax law,

the taxpayer would be eligible for the full $250,000 exclusion and would pay tax on the

$50,000 remainder. Under the new law, the exclusion would have to be prorated as follows...

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