Liz Weston is a Certified Financial Planner and a personal finance columnist for NerdWallet. She provides expert advice on managing finances, investing, and navigating complex financial rules. The tax implications of selling a home have undergone changes over the years, causing confusion among homeowners. Prior to 1997, homeowners could roll over profits from one house to the next, taking a one-time exemption of up to $500,000, with capital gains only due on the amount above that threshold.
However, the Taxpayer Relief Act of 1997 introduced significant changes to the rules. The exclusion amount of $250,000 for single filers and $500,000 for joint filers has remained unchanged since then. This exemption applies to the gain on the sale of a primary residence, provided the homeowner has ---d in the property for at least two of the five years preceding the sale.
The current real estate market presents challenges for many homeowners. With the median home price in the U. S. exceeding $400,000 and entry-level homes topping $1 million in over 200 cities, a growing number of longtime homeowners face capital gains taxes when selling their homes. To navigate these complex rules, homeowners should consult with a financial advisor or tax professional.
It seems like the previous rules were that home sale profits could be rolled from one house to the next and one would take a one-time exemption for ...Other references and insights: See here
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