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Tax Issues
The following is a chart outlining the changes in the Taxpayer Relief Act of 1997.
TAXPAYER RELIEF ACT OF 1997 |
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OLD RULES
(REPEALED) |
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NEW RULES
(EFFECTIVE MAY 7, 1997) |
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Principal Residence
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Qualifying Property
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Principal Residence
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Any 3 of the Last 5 Years of Ownership |
Length of Occupancy
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Any 2 of the Last 5 Years Ownership |
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$125,000 (IRC§121) |
Tax Exclusion or Gain |
$250,000 for Individual or $500,000 for a Joint Return* |
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Once in a Lifetime (IRC§1034, Rollover) |
Frequency of Use
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Every Two Years** |
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55 or Older |
Age of Taxpayer
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No Age Restriction |
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Must Be Equal or Greater |
Replacement Property
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No Replacement Necessary Replacement Property NOT considered |
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No |
Deduction for "Loss" |
No |
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*If one spouse has used the deduction in the prior two years, only $250,000 is available for the other spouse. Once two years have passed since the last exclusion the $500,000 would be eligible.
**A pro rate portion of the exclusion is allowed if the sale is required by change in place of employment, health or other unforeseen circumstance.
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