DEAR BOB: You recently told a reader he could use income averaging on his long term capital gain profit from selling a property. As I read the IRS instructions, it says the first $3,000 isn't eligible. Is that correct? Frank R., Hagerstown, Md.

DEAR FRANK: To qualify for income averaging, this year's income must exceed your average income for the last four years by at least 20 per cent. But if this amount is $3,000 or less, you won't qualify for income averaging.

DEAR BOB: What do you think of buying vacant land and holding it for resale profits in a year or two? Brent Y., Laurel.

DEAR BRENT: For you to profit from a land investment, its value must appreciate at least 20 per cent per year. That target is hard to reach in most areas.

During your holding period for vacant land, property taxes and mortgage payments must be paid, often with little or no cash coming in. These holding costs often total 10 to 15 per cent of the land's value. In addition, inflation costs another 6 or 7 per cent. That's why the land's value must appreciate at least 20 per cent per year to make any profit. Raw land investments are definitely not for novices.

DEAR BOB: Are there any tax disadvantages of owning investment property in joint tenancy? Emmich L., Woodbridge.

DEAR EMMICH: Yes, there can be significant tax disadvantages of owning investment property in joint tenancy.

For example, the entire property's value is includable in the estate of the first joint tenant to die unless the surviving joint tenant can prove financial contribution to purchase his interest in the property.

Before taking title to property in joint tenancy, consult an estate planning attorney to be sure a tax angle hasn't been overlooked.

DEAR BOB: We have $35,000 equity in our home. Should we sell and reinvest in a duplex for rental income and tax shelter? Mrs. Robert S., Frederick, Md.

DEAR MRS. ROBERT S: If you like your present home, why sell? Refinance its mortgage or add a second mortgage to raise tax-free cash to buy that duplex. The more property you own, the better protected you'll be against inflation.

DEAR BOB: If I sell my home for $30,000 and don't reinvest in another home, how much capital gains tax must I pay? Fanny D., Alexandria.

DEAR FANNY: All of it. Your entire sale profit will be taxable unless you qualify for a tax-saving rule: (1) residence replacement rule, (2) over 65 rule, or (3) installment sale rule.

DEAR BOB: Can you recommend any good books on investing in income property and any courses? Jack B., D.C.

DEAR JACK: I still recommend William Nickerson's "How I Turned $1,000 into $3 Million in Real Estate in My Spare Time." But now there's an even better book just published by Simon and Schuster. It's Albert Lowry's "How You Can Become Financially Independent by Investing in Real Estate."

As for real estate classes, many colleges and universities offer excellent low-cost courses from beginning real estate principles through advanced taxation, investing, managing, and appraising. Many are offered at convenient evening hours.