Gain Or Loss From the Sale of A Residence
Starting May 6, 1997, new tax rules regarding the treatment of gains and losses on the sale of a residence came into effect.
The new provisions allow an unmarried individual to exclude from income up to $250,000 in gains realized on the sale or exchange of a residence. For married taxpayers, this exclusion amount is $500,000. The taxpayer must have owned and occupied the residence as a principal residence for an aggregate of at least two of the preceding five years from the date of the sale. An exception to the two-year requirement may be allowed in cases of hardship and unforeseen circumstances.
This exclusion may be used on a continuing basis, but not more frequently than once every two years. The pre-May 7, 1997 residence gain rollover and one-time $125,000 exclusion rules were replaced by this rule as of its enactment date.
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Call Us for Additional Information at (310) 444-3041