Continued from real estate Question & Answer section

Q. Tim, I've heard about the new tax law but I am not sure how it might affect me. Could you give me some info?

Mike in Memphis

A. The new federal tax law involving your home is summarized as follows:

Single taxpayers may exclude up to $250,000 of capital gain and married taxpayers filing jointly may exclude up to $500,000 of capital gain on the sale of their principal residence. You must own and use the property as your principal residence two out of the previous five years. And you cannot use this exclusion more frequently than every two years with some minor exceptions. This will give homeowners the opportunity to free up equity by selling a home and will not be required to buy a larger home to defer the taxes. You are free to buy a more expensive or a less expensive home. Since there is no longer a 55 year age requirement to exclude the gain, homeowners may decide when to sell without be concerned about eroding their equity by having to pay tax on the gain. You are still required to keep records of the basis of your home, most especially, the amounts that are considered capital improvements. As always, consult a tax professional for specific issues. If you would like a Homeowner's Tax Worksheet sent to you, please let me know. And if you need any additional information, please call me. I would be happy to help you with all of your real estate concerns. If you hear of anyone who needs my services please direct them to this web site or have them contact me at tim@talktotim.com

Your real estate professional,

Tim Lynch