Monday, November 20, 2017

How Do Capital Gains Tax Exemptions Work?

Do you know how capital gains exemptions work? If not, don’t worry because we’re explaining them today.

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We’ve been having a lot of conversations lately about capital gains tax exemptions for homeowners. Here are two of the most common scenarios we run into.

In one scenario, a homeowner tells us they are considering selling their home, but wanted to know more about how they can save some money on the proceeds of their sale. If they have owned the home for at least two years and if it has been their primary residence for those two years, then the homeowner is eligible for a capital gains tax exemption when the time comes to sell the home. If they’re single, the exemption covers up to $250,000. For married couples, that number doubles to $500,000.

Capital gains exemptions are a great tool for homeowners looking to build wealth.

In another scenario, a homeowner wants to sell and take advantage of the exemption but isn’t quite sure if they qualify because they haven’t lived in the home the entire time. If they have lived in the home for at least two of the last five years as a primary residence, then they qualify.

If you have any questions for us about capital gains tax exemptions, we’d be glad to answer them.
Give us a call or send us an email today. We look forward to hearing from you.