Truth 33Home-sale tax exclusion
On May 7, 1997, tax life for home sellers changed dramatically and for the better.
Before that day, to avoid tax on home-sale profits you had to use the sale money to buy another property. If you happened to be 55 or older back then, you were able to keep up to $125,000 in profits tax-free. But that was a one-time exclusion, and you had to fill out the proper paperwork to prove that you didn’t have to pay Uncle Sam some of your money.
But since that May day, home sellers have been able to keep up to $250,000 of home-sale profit, or $500,000 for married couples filing a joint return, out of IRS hands.
Now you don’t have to be a certain age. There are no forms to fill out. You simply have to meet some simple ...