Tax Relief
Did you know that the Taxpayer Relief Act of 1997, allows married
or filing joint return taxpayers to exclude capital gains from the
sale of their primary residence up to $500,000 from federal taxes?
Single or married filing separately could exclude $250,000 from
federal taxes.
This means that you could possibly not pay taxes on the sale of your
residence if it was if your primary home for two of the last five
years. We are talking tax free!!
The new law allows capital gain exclusions whether you "buy up" to a
more expensive home or "buy down" to a less expensive one. If you
have a gain above the limit, and you held the property for less than
one year, it will be taxed as ordinary income art the rate of 28%. If
you hold the property over five years it is taxed as Long Term Gains;
20%.
Beginning in 2001, the capital gains rate drops to 18% for taxable
gains on a principal residence that you have occupied for more than
five years.
Homeowners can now consider several new options. Later in life many
people find themselves at the "Empty Nest Stage"; their children are
grown and left a four or five bedroom home with a large equity. For
many of these people, their home is a major investment and this new
law will allow them to unlock the equity.
Have your Real Estate Professional put you in touch with a tax advisor
to assist you with your particular circumstances.
Work with one of Pensacola's finest Real Estate Professionals today!
Call me anytime if I can help you at 850-341-4489 or email me!
