Q: DEAR BOB: I sold my principal residence in January with a capital gain of about $400,000. The same day, I bought another house using the profit as a down payment. I was single until April. Mine was the only name on the title to the house that was sold. But my partner (now wife) and I had been splitting the mortgage payments for more than 24 months. It was our primary residence for more than two years before the sale. Can we file jointly and receive a $500,000 capital gains tax deduction?

– Tim C.

Major insurance companies are throwing cold water on America’s new passion for living near the ocean and by the bay.

Recently, the biggest companies in the homeowners insurance business announced that they will stop writing new policies in some coastal areas of the mid-Atlantic and will otherwise limit coverage there. They have already reduced their coverage in states more prone to hurricanes.

Enalee Bounds has filled 20 guest books with the names of national and international visitors to the antique and gift shop she has owned for 44 years in Ellicott City’s historic district, defying predictions by local banks and area business owners that her country store would never last.

When she opened the store in 1962, Ellicott City, the Howard County seat and one of Maryland’s oldest mill towns, was in decline.

WASHINGTON — Sales of new homes rose in November while the backlog of unsold homes fell for a fourth straight month, providing hope that the serious slump in housing could be ending.

Sales of new single-family homes rose by 3.4 percent last month to a seasonally adjusted annual rate of 1.047 million units, reflecting solid sales increases in every region of the country except the South, the Commerce Department reported Wednesday.

You may be thinking about the holidays, but thousands of your fellow homeowners have been thinking about refinancing, rate reductions, cash-outs and money-saving debt consolidations.

For the past two weeks, they have been bombarding lenders with applications for mortgage refinancing — driven by the most attractive rates in more than a year. Refinancings were up in mid-December by 60 percent over the corresponding period last year, and they accounted for more than half of all new mortgage applications — the highest proportion since the spring of 2004.

With the year-end holidays upon us, it seems appropriate to make a wish list for 2007.

You can think of this potpourri of gardening trivia as a collection of stocking stuffers:

Just a few years ago, the abandoned office building on Eastern Avenue in Silver Spring was a bleak eyesore occupied occasionally by homeless people. Debris and weeds filled its parking lot.

Rescued from decades of neglect, the building was reincarnated as a 56-unit condominium in late 2004. The parking lot was reborn as a courtyard filled with sculpture, native plants and flowering trees.

Home sales dip in the winter, especially during the holiday season. But they don’t stop, as Ray Hrabec has learned over the years.

Hrabec and his wife, Paula, sold two of their past homes between Thanksgiving and New Year’s Day, most recently a townhouse in Old Town that they had yanked off the market several times before they found a buyer several years ago.

By Lavonne Kuykendall

From The Wall Street Journal Online

Bucking the trend of insurers cutting back coverage for homeowners who live in storm-exposed areas,Chubb Corp. said it will begin offering excess flood coverage policies for its upscale customers who live along the coasts of Florida, New York and other states.

The new policies cover water damage from hurricanes, storms and other types of flooding and are meant to supplement the National Flood Insurance Program that has largely replaced the private market in first-dollar flood protection.

The offer to cover hurricane flood damage puts Chubb, Warren, N.J., at odds with other insurers, who are cutting back in the area.

After a record-breaking 2005 storm season, insurers and risk modeling companies came to believe that coming years will have more hurricanes than average, and that coastal areas as far north as New York could be more vulnerable to a big storm than generally thought.

Allstate Corp. has been the most aggressive in cutting its exposure to huge hurricane losses. This year, the insurer said it will stop writing new homeowners policies in New Jersey, Connecticut and Delaware, and is cutting back in Florida and coastal New York.

Chubb, whose homeowners market share is far smaller than Allstate’s, primarily insures more upscale homes whose owners may find the $250,000 building damage limit of the national flood program inadequate.

“This is something our customers have demanded of us,” said Peter Spicer, new product manager, Chubb Personal Insurance, who credited Hurricane Katrina with drawing homeowners’ attention to the problem of inadequate coverage.

But at the same time that homeowners are clamoring for more coverage, “you see carriers making adjustments to portfolios because new catastrophe models are suggesting they are more exposed than they thought they were.”

Chubb customers who decide to add on the coverage will get a bill in the general range of $5,000 to $7,000 annually for $1 million to $2 million of coverage, Mr. Spicer said. That is on top of their regular homeowners policy and federal flood insurance, he said. The policies are available in 15 states and will eventually be available in a few more.

Although the price tag is substantial, he said customers who investigate their national flood coverage are typically receptive to the idea “when they realize how little coverage they get on the government policy,” Mr. Spicer said.

He also said the Chubb policy offered extras such as coverage for additional living expenses if a house is rendered uninhabitable by flooding.

This year, Chubb began offering first-dollar flood coverage in some areas, but not for homeowners near a coastline. The active hurricane season last year, along with news coverage of major insurers who are dropping coverage “opens a door,” for Chubb agents to talk to their customers about the new policy, and perhaps make a sale, he said. “It is an unfilled need.”

Email your comments to rjeditor@dowjones.com.

– December 22, 2006