If you are lucky

enough to own two properties, and want to sell

both of them, it may be possible to exclude gains

from both. Sell your current primary residence

first, take the exclusion, and move into the

rental property. After a period of two years, you

can sell it as your primary residence and take

another exclusion.

The good news is

that by converting the second property into a

primary residence, you can exclude capital gains

resulting from appreciation while it was a

rental, up to the $250,000 or $500,000 cap.

Remember, however,

that any depreciation taken after May 6, 1997

will be subject to recapture and tax. Under this

scenario, depreciation taken before that date is

forgiven and available for the gain exclusion.

Talk to your

financial advisor for more ideas about saving on

capital gains, and consult IRS Publication 523

for the rules.

For more

information on any aspect of buying or selling a

home, go to www.realhome.com , the web site

for American Homeowners Association.