Tax exemption applies to more than homes

      DEAR BOB: We live in a manufactured home built and purchased about 10 years ago. We used the old, now-repealed "over 55 rule" $125,000 sales tax exemption when we sold our former residence. Our home is on a leased lot in a senior park. We pay an annual tax bill.
      We're in the process of selling our manufactured home and plan to move into a "stick-built" tract house. Although our home is on leased land, it is our principal residence. Will we be eligible for the new $500,000 ($250,000 per spouse) home sale tax exemption? -- Marian R.
      DEAR MARIAN: New Internal Revenue Code 121, the $250,000 home sale tax exemption ($500,000 for a married couple filing jointly), applies to all types of principal residences. You need not own the land underneath your home; it can be leased land. Even a houseboat or a recreational vehicle can qualify.
      To qualify, at least one spouse must have owned and occupied the principal residence any "aggregate" two out of the last five years before the sale. The non-title spouse must meet only the occupancy requirement.
      Although manufactured homes usually do not appreciate much in value, if you had any deferred profit from the sale of your previous principal residence, this new tax break applies to it also.
      Any loss on the sale of your home is not deductible. Please consult your tax advisor before selling.
      -- Send your questions to Robert J. Bruss, Tribune Media Services, 435 N. Michigan Ave., Suite 1400, Chicago, Ill. 60611.