The Federal Tax Code has significantly improved the American taxpayer's ability to profit by selling a principal residence. Prior to 1997, homeowners could take advantage of a tax benefit termed the "rollover", which granted exemption from capital gains taxes on the net profit from the sale of a home. Homeowners who used profits to purchase a bigger and better home did not have to pay tax. And homeowners over the age of 55 were given a once-in-a-lifetime exclusion from taxes on profits of up to $125,000 on the sale of their principal residence.
Compare those tax breaks with our current, streamlined and potentially more profitable arrangement that replaced both the rollover and the one-time exemption. If you are a married home-seller filing jointly, you may enjoy up to $500,000 in tax-free home sale profits, provided you have occupied the property as your principal residence during two of the last five years. Taxpayers who file singly get a $250,000 capital gains exclusion. Homeowners are eligible to exclude capital gains on the sale of a principal residence as often as once every two years.
The law allows capital gain exclusions whether you "buy up" to a more expensive home or "buy down" to a less expensive one. The tax-free dollars can be used in any way you want. Consult your tax advisor for detailed advice about your particular circumstance.
Lacie Maynard Realty Executives 3479 Gulf Shores Parkway, Ste. B Gulf Shores, AL 36542 800-760-6019 Fax: 251-968-4340 laciemaynard@NUMBER1EXPERT.com
Always willing to go the extra mile, Lacie's outstanding attention to detail has earned her continual referral business as well as a wealth of new business. For nearly a decade, Lacie has been a top listing and selling agent all along the Alabama Coastline.
As one of America's NUMBER1EXPERTS™ in the Gulf Shores, Orange Beach and Foley area Lacie is well equipped to guide you through all your real estate needs. Call or email her today!
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