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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: wlheatmoon who wrote (48698)	2/24/1999 4:02:00 PM
From: RealMuLan	Read Replies (1) \| Respond to of 132070

Anybody buy the dip yet? It's time<g>.

To: wlheatmoon who wrote (48698)	2/25/1999 12:06:00 AM
From: Ilaine	Read Replies (1) \| Respond to of 132070

>>>>>Could you give me a brief synopsis of the current law about the tax gains?<<<<< Ok, this is off the top of my head, so check it out first. It used to be that you didn't have to pay capital gains tax on the proceeds of the sale of your personal residence if you rolled it over into a new personal residence within a certain time frame. (A year or two, I think two.) There was also a once-in-a-lifetime exclusion which you were eligible for at age 55. I forget the exact particulars, and it doesn't matter, because that's all done with. Finito. The new law is that you can exclude up to (and this is the part where I am shaky, the dollar amount) I think $250,000 if you are not married, and $500,000 of capital gains on the sale of your personal residence if you are married filing jointly. If you have more than that (I suppose that someone might - Bill Gates comes to mind) then you have to pay the tax on the excess. You can't roll it over. As I understand it, there is no limit on the number of times you can do this, with the caveat that you must have been living in the house for two years prior to the sale, so that effectively limits you to once every two years. There are exceptions made to the two year limit for hardships, like being transferred, but the dollar amount excluded is pro-rated in such instances. When the law was enacted, the Washington Post had an interview with the guy who thought of it, and got the Clinton administration to push it. He observed that people who moved had to keep buying bigger houses, further out from the central cities, in order to avoid capital gains tax, so this was contributing to the death of cities, similar to the development of the interstate system in the 1950's/1960's. The goal is to let older people move into smaller houses, older houses, cheaper houses, houses that are closer to the center of the cities, and not have to pay the taxes. So that was why I was surprised about the suggestion that the monster houses are a result of the new tax law. But, I think you may be right. Why worry about the potential appreciation of your house when you won't have to pay tax on it? If it works out, it's a great investment. And the clincher is that the timing works out, the new law and these monstrosities are coincident in time. I have been looking for a new house for a while now, and I really hate these puppies. I want a custom home, but not in one of these horrible developments, I have read they use fractals to determine how to get the most houses on the available land. And we thought Levittown was hideous.