How will the capital gains tax laws affect my loan?
$500,000 IRS Tax Exclusion The following relates to the Federal bill signed on August 5th, 1997 that provides tax gain exclusions for principle residences up to $500,000! You must be married and file a joint return to receive $500,000. The amount for non-joint return is $250,000 You may claim this exclusion every two years and you do not have to buy a new residence to do so Those that claim a home office have to depreciate a recapture on that portion – see your tax accountant. All age restrictions have been eliminated. The old law was age 55 and had a limit of $125,000. You must have owned the home for at least two years of the five year period ending on the sale date. You must have used the residence as a principle residence for which the exclusion is taken after May 7, 1997 or face a gain tax. A property that is partially used as residence may qualify for homestead status if occupied by December 1st, however county assessor notification is required by December 15th. If the residence
