Bebe, glad we could help.

This is a good site to visit for selecting a CPA:
http://www.dca.ca.gov/cba/consumers/slectcpa.shtml

And, you can use the following link to find a licensed CPA near you:
http://www2.dca.ca.gov/pls/wllpub/wllqryna$lcev2.startup?p_q…

Best, Steve

Thank you Steve and Suzanne for responding and for your e-mail information and website to research. This at least will get me started on what questions to ask.

Hi Bebe,

Suzanne is absolutely right - you need to identify a CPA/Tax Specialist to navigate your best financial path. Your situation is not simple, nor completely clear as to who owns the home now or what the status of the property is (primary residence or investment property). There are many "twists & turns" concerning Tax Code Section 121. As a Q&A sample see: http://www.brittoncpa.com/house.htm

Be aware that new Capital Gains Exclusion rules became effective January 1, 2009. The new rules only apply to homeowners moving into property formerly designated as a second home or investment property.

If you desire, IRS Publication 523 (2008), "Selling Your Home" covers the Cap Gains Exclusion in more detail (has not been updated for 2009 yet:
http://www.irs.gov/publications/p523/index.html

Best, Steve

Hi Bebe,
I would recommend that you speak with a tax specialist. I have one that we personally use along with many of my clients. Please email me offline if you would like his name.
Regards,
Suzanne Looker, slooker@rockcliff.com