Individual taxpayers now may exclude up to $250,000 ($500,000 in the case of a married couple filing a joint return) of profit realized on the sale or exchange of a principal residence.
Rollover and Over Age 55 Exclusion Rules are Eliminated
Under the new tax law, there are no longer any requirements to roll over home sale proceeds and reinvest them into a home of equal or greater value in order to earn a tax exclusion. The Over Age 55 one time exclusion rules have also been eliminated.
Some Reporting Requirements Eliminated
The new law excludes sales of personal residences with a gross sales price of $500,000 or less ($250,000 or less for a single seller) from the requirement to report real estate sales to the IRS.
New Benefit Available Once Every Two Years
Taxpayers who have owned and occupied a home as a principal residence for at least two of the previous five years prior to any sale or exchange can take full advantage of the exclusion. (There is a special formula provided to give partial exclusion to those who cannot satisfy the two-year requirement.)
This information has been summarized.
For complete details, seek the advice of a CPA or other Tax Professional.
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The materials contained within this page may not be reproduced without the express written consent of COLDWELL BANKER BURNET. The information herein is believed to be accurate and timely, but no warranty as such is expressed or implied.