Are you worried that a huge tax bill will come due when you sell your home?
Capital gains tax is something we’d rather face as infrequently as possible. Fortunately, when now sell your home, you’ll be able to pocket a huge amount of those profits tax-free.
A change in the tax code now permits you to take up to the first $250,000 in profits tax free when you sell your home. If you’re married, you can take up to $500,000 in profits tax free.
What’s the catch? You must have lived in this home as a primary residence for 2 of the last 5 years. If you’ve lived in the home less than 2 years, you may take a proportionate share of the profits tax free.
You may take your home sale profits tax free no more than once every 24 months, but any age requirements have been scrapped.
So no matter how old you are, as long as you’ve lived in the home for 2 of the last 5 years, you’re home free.
For more details, consult your tax advisor.
Published: Feb 3, 2003
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