Question
Tim and Alison bought their first house in 1996 for $633703. In 2007 they purchased a cottage for $138356. Alison found out in September of
Tim and Alison bought their first house in 1996 for $633703. In 2007 they purchased a cottage for $138356. Alison found out in September of last year that her employer was permanently transferring her to their Munich office in April of this year. She and Tim decided to move there and sold the house and cottage last December for $968665 and $171827 respectively. They want to maximize the total gain that can be sheltered under the Principal Residence Exemption (PRE) for both properties.Assuming they shelter the maximum gain they can under the PRE for the house property, what is the maximum amount of the gain on the cottage property that can be exempt under the PRE?
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