Capital Gains - The Real Truth of the new federal tax law.

In case you haven't heard yet or you are not sure how it might affect you, I wanted to give you some information about the new federal tax law involving your home.

Single taxpayers may exclude up to $250,000 of capital gain and married taxpayers filing jointly may exclude up to $500,000 of capital gain on the sale of their principal residence.

You must own and use the property as your principal residence two out of the previous five years. And you cannot use this exclusion more frequently than every two years with some minor exceptions.

This will give homeowners the opportunity to free up equity by selling a home and not being required to buy a larger home to defer the taxes.  You are free to buy a more expensive or a less expensive home.

Since there is no longer a 55 year age requirement to exclude the gain, homeowners may decide when to sell without be concerned about eroding their equity by having to pay tax on the gain.

You are still required to keep records of the basis of your home, most especially, the amounts that are considered capital improvements. If you need a Homeowner's Tax Worksheet to help you with this, please let me know.

If you need any additional information, please call me. I want to help you and your friends with all of your real estate concerns. Thank you for keeping me in mind if you hear of anyone who needs my services.

Sincerely,

Teresa N. Snyder

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