Expert: Lori Frankfort - 9/3/2008

Question
Hello Lori,
I have a law suit which could make the people sell thier Lake Forest Home. Zillow property search lists its value at $600,000.00. If they are forced to sell to settle the law suit they want to claim $150,000.00 Primary Residence Exemption. The husband and wife have just turned 60 years old.
Upon discovery i have found that they have taken in a boarder which pays monthly to them $2,750.00. The owners state they still live in this house along with the boarder and pay all the utilities.
Somehow i feel this house does not qualify as thier Primary Residence.
Would you comment on this please.

Answer
It definitely does qualify as their primary residence, regardless of the boarder.  They just have to claim the rental income at the end of the year on their taxes.  As long as they are there they can have whomever they want stay on.  They only need to live there a majority of the time each year.

I wouldn't count on Zillow's property values right now...  I've been watching the value of my home on there for comparison and it's all over the place.  You need to ask a qualified Realtor to pull "comps" for you.

Best,
Lori