Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

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Archive for September 15th, 2009

Changes to tax free home sale rules?

Posted by taxguru on September 15, 2009

Q:

Subject:  Sale of Primary Residence

I am trying to find out when the $500,000 ($250,000 per spouse) Exclusion expires; and what is the current thinking on how it would be changed.

Sincerely

A:

The current law allowing the tax free exclusion of some or all of the gain from the sale of a primary residence (aka Section 121) was enacted in May 1997 and does not have an expiration date.  It will be the law, with the exact same dollar amounts (unadjusted for inflation) until our rulers in DC explicitly change it.

While nobody can know for sure what changes, if any, this law will have in the future, I can guess at a few possible ones.  It is very likely that some provisions of this law will be trimmed back for home sellers.

Going back to a once in a lifetime usage, rather than the current once every two years, would probably be a politically acceptable change since that was how it applied for several decades prior to 1997.

Another likely change with the growing sentiment in DC to screw over the evil rich would be to completely or partially deny the exemption to those taxpayers with AGIs over a certain dollar figure that our rulers will establish to define them as evil rich who are unworthy of any more tax breaks.  Several other tax deductions and credits already have AGI eligibility thresholds; so this would be consistent with that.

Your own personal professional tax advisor should be up on the latest laws in regard to home sales; so any planned sale should be run by him/her first.

I hope this helps.  Good luck.

Kerry Kerstetter

Follow-Up:

Dear Kerry
 
Thank you so very much for the information … it is extremely helpful
 
Sincerely

 

 

Posted in 121 | Comments Off on Changes to tax free home sale rules?

Posted by taxguru on September 15, 2009

House Republican Leaders Ask IRS to Sever Ties with ACORN – It looks like that crime syndicate’s community tax work was officially sanctioned by IRS after all. Where will child sex slave-masters go to for their tax help now if ACORN is out of that business?

 

Posted in Acorn | Comments Off on