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Windermere Real Estate/West Sound, Inc.
Wayne Paulson | Poulsbo: 360-598-5291 | Port Ludlow: 360-437-9508 | Bainbridge Island: 206-780-1500 | wpaulson@windermere.com

Targeted Reductions in the Primary Residence Capital Gains Exclusion

Posted on December 11, 2008
The 2008 Housing and Economic Recovery Act included tax incentives to facilitate financing and to help first-time home buyers. Because the act was designed to be revenue neutral, there were also provisions that increased taxation. One of those provisions includes targeted reductions in the capital gains exclusion homeowners enjoy when they sell their home. The changes apply to those individuals who own a second home or rental property that is converted into a primary residence. Part of the gain from the sale of such a home will be taxed at prevailing capital gains rates and part will be excluded from taxation, based on the fraction of time the home was used as a primary residence. The changes are effective January 1, 2009.

If this applies to you, it could have significant tax implications.

For a more detailed explanation of the changes and examples, click on link below:

Exclusion Changes 
 
 
 

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