Strategy: Establish the home as your principal residence. Then stop using the home as your main home after two years. Result: Any subsequent nonqualified use won’t count against you.

You still may qualify for the maximum home-sale exclusion for a home converted after 2008.

Here’s the whole story: If you sell a home that has been your principal residence for at least two of the past five years, generally, you can exclude up to $250,000 of gain from federal income tax ($500,000 for joint filers). This is not a one-time deal—you can pocket the maximum exclusion multiple times as long as you qualify.

But there’s a new tax pitfall for home sales after 2008. The portion of the gain allocated to nonqualified use of the home after 2008 doesn’t qualify for the $250,000/$500,000 exclusion. Nonqualified use is defined as any use that is not use as a principal residence.

Thus, if you use the home as a vacation home or a rental property after 2008, part of your gain from a later sale may be ineligible for the gain exclusion break. The taxable part will be a taxable gain. The maximum tax rate on long-term capital gain is 15% (25% for gain attributable to depreciation).

To determine the taxable amount, divide the amount of time the home was used for nonqualified purposes by the total time of ownership.

Example: You and your spouse bought a vacation home on Jan. 1, 2002, for $200,000. On Jan. 1, 2010, you move into the home as your principal residence. Then you sell the home for $600,000 on Jan. 1, 2012.

Although you qualify for the home-sale exclusion, 10% of the time you’ve owned the home (one post-2008 year out of 10 years) is nonqualified use. So 10% of the $400,000 gain—or $40,000—is subject to tax.

Key tax break: Once you stop using the home as your principal residence, any subsequent nonqualified use is disregarded. Therefore, if you put yourself in the opposite position—you convert a principal residence to a vacation home—you’re completely in the clear.

Going back to our example, say that the home bought in 2002 was your principal residence.  

After using it as a vacation home for one year, you sell it at a $400,000 gain in 2012. In this case, the entire gain is tax-free. Reason: The nonqualified use from the point you no longer use the home as your principal residence doesn’t count.

Even if you’re tripped up by the new tax crackdown, you still may be able to claim the maximum $250,000/$500,000 exclusion. Suppose you sell the vacation home in our original example at a $600,000 gain (instead of $400,000). You qualify for the maximum $500,000 exclusion because only 10% of the gain, or $60,000, is attributable to nonqualified use.

The $100,000 remainder ($600,000 gain – $500,000 exclusion, which includes the $60,000 portion of the gain from nonqualified use) is taxed at the 15% rate. So here, the new nonqualified-use rule makes no difference.

Tip: Another tax rule requiring you to recapture depreciation on a home claimed after May 6, 1997, still applies.