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Tax Considerations >Tax Implications of Selling Your House
Most of my clients profit from selling their homes, and they often have questions about capital gains tax.
When you sell your primary residence, you are not taxed on your profit if (1) you have lived in the home for two out of the last five years and (2) your gain does not exceed $250,000 as a single taxpayer or $500,000 as a married couple filing jointly. Gains above these limits are taxed at the current rate of 15% for higher income taxpayers and 5% for lower income taxpayers. In 2008 the 15% rate will continue for higher income taxpayers; while the 5% lower income rate will drop to 0% for the 2008 tax year only. On January 1, 2009, the long-term capital gains tax rates will once again be 15% and 5% through 2010.
Homeowners can use this tax-free provision every two years. As set forth in the American Job Creation Act of 2004, properties converted from a 1031 exchange property into a primary residence must be held and used as a primary residence for at least five years to qualify for the tax exemption.
Consult your tax accountant for more detailed information regarding your particular circumstance.
Bill and Debbie Nelson, CRS and GRI Bill & Debbie Nelson and Marsha Dorris Weichert, Realtors - Lake Realty 6268 S. Kings Ranch Rd., Suite #12 Gold Canyon, AZ 85118 602-300-2777 602-686-6989 480-213-7275 Fax: 480-452-0938 Email: movetogoldcanyon@NUMBER1EXPERT.com
The Bill and Debbie Nelson Team - a Priceless Combination in Gold Canyon, Apache Junction and East Valley real estate. Bill & Debbie Nelson and Marsha Dorris find few things more rewarding than helping people connect with their dreams. Whether you�re looking to buy or sell a permanent residence or a vacation home, your move is sure to be a rewarding experience with these seasoned professionals by your side.
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