Capital Gains

Capital gains in residential real estate.

The new capital gains law allows homeowners to avoid paying taxes on the first $500,000 of profit if they are married or on the first $250,000 if they are single.
You must have lived in the home as your primary residence for two of the last five years.
You are allowed to use the provision as often as you like, as long as it fits in that
two year period. Any gains above the limit will be taxed at the new 20% capital gains rate - down from the current 28 %.
The old law provided a $125,000 "one time" tax free exclusion on profits for home sellers
55 or older. This no longer is used, but those who have used it will be allowed to use the new provisions without penalty.
Under the old law you could roll over gains if you bought a more expensive house.
If you sold a more expensive one and purchased a less expensive one you were liable
for gains tax. Under the new law this provision is no longer in effect.
So now you can take a profit of a half million dollars on your existing home and invest it, tax free, in Tyler Texas real estate! Hopefully this glorious homeowner's tax break won't be taken away from us.