Second homeowners see fewer perks in new housing bill

Some homeowners, hoping to save a buck on taxes, convert their secondary homes into primary residences for two years before selling them, allowing them to exclude up to $250,000 for individuals and $500,000 for couples from the gain on their tax returns. A new law in the housing-stimulus package signed by President Bush last week could reduce this perk by closing up what many refer to as a loophole. The new law “will certainly complicate tax returns,” said John Olivieri, a tax partner at White & Case; it “contains traps for the unwary,” he said.