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  1. #1
    Join Date
    Apr 2009
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    5

    Default Foreclosure House

    my friend has a principal house that being foreclosed in 2008. he moved to another property belong to him, but sister and parent lived there. can the principal home qualified to be discharged even he has two houses under his name? Can the IRS treat the foreclosed home to be a second home and disqualifed for tax forgiveness?

  2. #2
    Join Date
    Oct 2006
    Posts
    16,474

    Default Re: Foreclosure House

    Quote Quoting blessings
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    my friend has a principal house that being foreclosed in 2008. he moved to another property belong to him, but sister and parent lived there. can the principal home qualified to be discharged even he has two houses under his name? Can the IRS treat the foreclosed home to be a second home and disqualifed for tax forgiveness?
    In my opinon, no. It was his principal residence for two of the last 5 years.

  3. #3
    Join Date
    Apr 2008
    Location
    Texas (Dallas area)
    Posts
    1,404

    Default Re: Foreclosure House


  4. #4
    Join Date
    Apr 2009
    Posts
    5

    Default Re: Foreclosure House

    even they owned two properties? can someone allow to have two primary residents?

  5. #5
    Join Date
    Jul 2007
    Location
    Florida
    Posts
    2,344

    Default Re: Foreclosure House

    No, a person can only have one domicile, one primary residence at a time.

    See text copied below, from the IRS Regulations under I.R.C. Section
    121.

    PRINCIPAL RESIDENCE.
    In the case of a taxpayer using more than one property as a residence, whether property is used by the taxpayer as the taxpayer’s principal residence depends upon all the facts and circumstances.

    If a taxpayer alternates between 2 properties, using each as a residence for successive periods of time, the property that the taxpayer uses a majority of the time during the year ordinarily will be considered the taxpayer’s principal residence.

    In addition to the taxpayer’s use of the property, relevant factors in determining a taxpayer’s principal residence, include, but are not limited to:

    (i) The taxpayer’s place of employment;
    (ii) The principal place of abode of the taxpayer’s family members;
    (iii) The address listed on the taxpayer’s federal and state tax returns, driver’s license, automobile registration, and voter registration card;
    (iv) The taxpayer’s mailing address for bills and correspondence;
    (v) The location of the taxpayer’s banks; and
    (vi) The location of religious organizations and recreational clubs with which the taxpayer is affiliated



    Interestingly, the I.R.C. makes no mention of any "two out of five years" rule for determining a person's principle residence.

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