Q: I sold a large house and bought a smaller one because of easier upkeep. I received $59,000 for my old house and paid $32,500 for my new one. H&R Block, the company that prepared my income tax return that year, told me I have a $5,000 deferred capital gain on my present (new) home when I sell it. I paid $5,000 in capital gains tax that year. What's meant by the deferred capial gain?

A: This sounds to me like you sold a "principal residence" prior to selling the one that brought you $59,000. You have a deferred capital gain from that prior sale. That gain will continue to be deferred unless or until you sell your "principal residence" and do not purchase another. At that time, you'll have to pay the deferred tax unless you are at least 55 and take advantage of the one-time, $100,000 tax exclusion on the sale or exchange of your "principal residence."

Q: My wife and I just purchased a condominium in Reston as an investment. The financing was a low 101/4 percent, he tenant is super, the negative cash flow manageable, the purchase price reasonable, the location good. Yet my wife is so worried that she cannot sleep at night. The condominium is fueled by heating oil, and she feels that it was unwise to purchase any property not fueled by natural gas. What is the risk in buying a property that uses oil?

A: Unless the increasing costs of heating oil can be factored into your rent, there appears to be greater risk in owning an income-producing dwelling that uses oil rather than gas.