Legal Question in Tax Law in California

Capital Gains Tax

Please let me know which one is true..

1. Capital gains from the sale of one`s home is tax free to the amount of $500,000.00, not $600,000.00

2. This amount can be claimed once in a life time only. or can

3. This amount may be claimed every 2-3 years or so if the subsequent home sold at a large gain.

Thank you..


Asked on 1/30/02, 8:17 pm

1 Answer from Attorneys
Ken Koenen Koenen & Tokunaga, P.C.

Re: Capital Gains Tax

It is $500,000 for a married couple filing jointly, or $250,000 for a single person or a married person filing seperately.

It is not a once in a lifetime exemption. The property must be your principle residence, and you must have lived in it for 2 of the past 5 years.

You can also still do the equivalent of a 1031 exchange where you defer the taxes. Whether you should do that or the $500K depends on your overall tax situation.

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Answered on 1/30/02, 8:53 pm


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