Posted by writer in Realtors

Q: Our principal residence is in the District, and we have a second home in Delaware. I know that when we sell our principal residence, we will be eligible for the exclusion of tax on up to $500,000 of the gain. I also know that we can deduct our main home’s mortgage interest and real estate taxes when we file our annual income tax return. However, we do not know how to handle this for the vacation home. Can you give us some guidance?

A: It depends on how you use your second home. This is one of the most convoluted issues in our tax laws.

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