The tax laws beginning in 1998 and in some cases a little earlier have changed in regards to homeownership and the previous requirement to reinvest profits from the sale of a principal residence.

The new law allow married taxpayers filing a joint return to exclude up to $500,00 of gain on the sale of their principal residence. Single taxpayers can exclude up to $250,000 of gain.

To qualify for the exclusion, homeowners must have lived in and used the home as their primary residence for TWO OUT OF THE PRECEDING FIVE YEARS.

Homeowners are allowed to take the exclusion ONCE EVERY TWO YEARS.

Plus, HOMEOWNERS MAY TAKE THE EXCLUSION AS MANY TIMES AS THEY LIKE, there is no cap on how much total gain they may exclude in their lifetimes.

THIS IS A SIGNIFICANT CHANGE IN THE TAX LAW

consult an expert on taxes as they relate to real estate

 

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