Buying a home ahead

My husband and I plan to retire in eight years. Should we buy a condominium in Florida now? Our son and his wife would rent until we are ready to retire. We own a house here in New York that will be paid off in seven years. R. C.

Selling common stock, as you intend, to get cash for a down payment on a condo you plan to occupy later could offer several advantages. The condo would probably appreciate more in eight years than your stock. You can expect your children to care for the unit better than strangers. You would also gain the advantages of owning your housing when you retire.

But, in you case there is one hitch. Renting a house or condo to a relative does not permit you to charge off more than out- of-pocket expenses. The IRS will not permit you to charge depreciation when a rental is occupied by a relative even if the rental payment is fully competitive with rentals on other units in the area. Your deal may be okay without that tax shelter, but you should be aware of the rules.