Losing the Home Sale Exclusion Rule

home sale

The United States tax code, Section 121(a), allows a taxpayer to sell their primary personal residence tax free as long as the taxpayer lived in the property for two or more years.  However, the maximum amount that can be tax free under this rule is $250,000 for single taxpayers, $500,000 for married taxpayers.

Section 1038 of the tax code states that if the taxpayer reacquires the home after treating the sale of the home tax free, then the second sale of the home by the taxpayer is not tax free.  Basically, you can sell your home the first time tax free, but the second time is going to cost you some taxes.

If you are having tax issues or are needing tax preparation services, contact our law office at 816-524-4949 or www.Hoorfarlaw.com.

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