[Verse 1] Sarah owned her cottage for twenty-three years Lived there every January first, kept those records clear When she sold in autumn, capital gains appeared But the exemption formula dried up all her tears [Chorus] Principal residence, four plus years owned Divided by the years you called it home Multiply that fraction by your total gain Watch the taxable portion wash away like rain P-R-E saves the day, saves the day When you sell your house, there's a smarter way [Verse 2] Johnny bought a duplex, lived in half the space Other half was rental, different tax base Only fifty percent qualifies for the break Personal use portion, that's the piece you take [Chorus] Principal residence, four plus years owned Divided by the years you called it home Multiply that fraction by your total gain Watch the taxable portion wash away like rain P-R-E saves the day, saves the day When you sell your house, there's a smarter way [Bridge] One per family unit, that's the golden rule Spouses share one shelter, don't try to fool The four-year rule protects you from a quick mistake Even if you moved out, still some benefit you take [Verse 3] Change of use can trigger deemed disposition day When rental turns to personal, or flips the other way Forty-five day deadline to make your election choice File that form or lose your exemption voice [Chorus] Principal residence, four plus years owned Divided by the years you called it home Multiply that fraction by your total gain Watch the taxable portion wash away like rain P-R-E saves the day, saves the day When you sell your house, there's a smarter way [Outro] Ordinarily inhabited, that's the test you need Maximum exemption for your housing deed
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