new capital gains law allows homeowners to avoid paying taxes on the first
$500,000 of profit if they are married or on the first $250,000 if they are
single. You must have lived in the home as your primary residence for two of
the last five years. You are allowed to use the provision as often as you like,
as long as it fits in that two year period. Any gains above the limit will be
taxed at the new 20% capital gains rate - down from the current 28 %.
old law provided a $125,000 "one time" tax free exclusion on profits
for home sellers 55 or older. This no longer is used, but those who have used
it will be allowed to use the new provisions without penalty. Under the old law
you could roll over gains if you bought a more expensive house. If you sold a
more expensive one and purchased a less expensive one you were liable for gains
tax. Under the new law this provision is no longer in effect. Golf condos in
Pinehurst for sale.
If you bought and sold a home within 1 year, any capital gains would be taxed
as regular income. If bought and sold between 1 and 2 years, gains would be
taxed at the long term capital gains rate. Filing an extension may be a
consideration, talk with a CPA for advice. Needing to sell and move for
specific reasons may have cause for exclusion of gains tax prior to two year
Always save receipts for home improvements in a
"house file". If you don't qualify for the 2 year ownership rule, the
cost of improvements can be used to offset capital gains tax you may have after
the sale of your property.
- Wanting to downsize, children have all moved out.
- Retirement and move out of the area to less expensive area.
- Job relocation from area with high property values to lower values.
People with rental property could sell their current home, move into their
rental for two years and sell it under the $500,000/$250,000 provision with the
same benefits. Golf condos in Pinehurst for sale.
It is unknown how many people have been waiting to sell their property until
this bill was passed. One possible scenario: Many homes are suddenly put on the
Should not immediately affect property values as there
currently appears to be more buyers than sellers. Immediate effect would be
properties with more "days on the market". This would hurt sellers
needing to move soon or those sellers who listed the house over market value.
When more and more houses are put on the market with
fewer buyers this market peak will end. Property values could go back down
again like 7 years ago, to start a new cycle. Timing for those sellers sitting
on the fence could mean more money made. Contact your accountant or tax
attorney for advice.
The final package allows penalty-free early withdrawals of up to $10,000 from
an IRA to help with the down payment on a first-time home purchase. The IRA can
be the home purchaser's own account or can be a parent's or grandparent's.
Waterfront condos in Pinehurst for sale.
If you are not sure what tax consequence you face when
selling real estate, consult with a CPA or tax attorney and not a real estate
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provide information on Pinehurst real estate including Pinehurst Golf
and Waterfront homes, Pinehurst condos, and Pinehurst and Southern Pines
Commercial real estate.
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