Important Tax Issues
Every Real Estate Seller Needs To Know

1. Increase in the exclusion from capital gains tax on the sale of a principle residence from $125,000 in capital gains to $500,000 for filing joint taxpayers ($250,000 exclusion of profit for single taxpayer). This exclusion can occur every 2 years. The repetitive ability is a great opportunity to buy and sell a principle residence and either move up or buy down. There is no age restriction on who is eligible for this exemption.


2. First-time homebuyer incentives:

  • Save income in a tax-deferred IRA account with the purpose of saving for a down payment and withdraw down payment at any time without penalties for early withdrawal.
  • Parents can save money in a tax-exempt savings account for the purpose of assisting children with a down payment for housing.

3. Investments in real estate.


4. Reduction in capital gains tax rate from 28% to 20%. This will increase the profitability of a real estate holding.


* For these or any other tax law issues be sure to contact your accountant or tax advisor for further information and details.