Tax Policy Home Sellers Need To Know - Fox29 WFLX TV, West Palm Beach, FL-news & weather

Tax Policy Home Sellers Need To Know

WEST PALM BEACH, FL (WFLX) - Folks who sold a home this year may need to get ready to pay up now that its tax time.

Dollar-wise, the most important tax policy for home sellers to know is the capital gains tax exemption.

Anyone who sold their primary residence this past year and files a joint return, can exclude up to $500,000 of gain from the sale from taxation. Folks who are single or don't file jointly, exclude up to $250,000.

But there are some requirements. More specifically, there's an ownership requirement and a use requirement. The homeowner has to have owned and used the home as his or her primary residence for at least two of the last five years prior to the date of sale.

Afraid you won't meet the requirements? Before you panic, there are some exceptions.

  •  For example, a person who has to sell due to employment or health reasons may qualify for an exception and benefit from at least a pro-rata share.
  • And the law changed in 2003 to allow exemptions from the two year residency requirement for up to ten years for members of the military who are deployed.
  •  In 2008 further changes were made so that surviving spouses would have two years to sell a home following the death of a husband or wife.

The current rule is still not indexed for inflation, so there's still room for improvement!

This is a general informational article and is not intended to be the rendering of tax, financial, legal or other professional advice. Everyone's situation is different, so always consult with your own tax, financial and legal professionals.

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