If you bought your home years ago, it’s very possibly worth a lot more now.
But consider this…
If you own a highly appreciated home, selling could trigger a huge federal income-tax gain well in excess of what you could shelter with your principal residence gain exclusion ($250,000 or $500,000 for joint filers).
And on gains in excess of the above-mentioned exclusions, you could suffer substantial tax bills (federal plus state, if applicable).
Is there anything you can do to avoid a massive tax hit?
You bet there is as we’ll explain when you read my new article titled Tax Tips: Tax-Saving Double Play: Combine Home Sale with the 1031 Exchange!
Three ways our fact-filled article can help you:
- We’ll show you how to combine two valuable tax breaks. Here’s how this money saving strategy works. You combine the tax-avoidance advantage of the principal residence gain-exclusion break with the tax-deferral advantage of a Section 1031 like-kind exchange. With proper planning, you can accomplish this tax-saving double play with full IRS approval. You’ll get the whole story when you read the full article.
- We’ll explain principal-residence gain-exclusion basics. For the strategy to work, you generally have to pass two tests. The first test deals with how long you’ve owned the property. The second test concerns how long you’ve owned the property as a principal residence. You’ll get all the details when you read the full article.
- We’ll cover other important areas too. For example, we’ll explain:
- The treatment of gains from “relinquished property,” i.e. your former principal residence
- How to calculate your tax basis in the replacement property
- How, thanks to the date-of-death basis step-up rule, you can totally eliminate federal income taxes after the double play
- And much more!
All will be explained when you read the full article.