Legal Question in Real Estate Law in Massachusetts
real estate law
My first and primary home was purchased in 1998 and i am looking to resell this year. It was a two family property. I have probably realized a $200,000 gain over the 10+ years and i am wondering how this will affect taxes as my understanding is that if i am purchasing a new home i could roll the monies into it with no tax implications. I am wondering if it is different because it was a two-family home although it has been my primary residence since purchase. have reported income from the rental apartment for the past 10+ years
1 Answer from Attorneys
Re: real estate law
You are referencing the old law, which provided for a tax free rollover. The new law provides for an exemption of $250,000 for a single person or $500,000 for a couple for any profit on the sale of the home. To the extent you depreciated the property the depreciation will be subject to recapture.
IRS:
For qualifying sellers, the maximum exclusion amount of $250,000 ($500,000 for a married couple filing jointly) is limited to the percentage of the two years that the person fulfilled the requirements. Thus, a qualifying seller who owns and occupies a home for one year (half of two years) � and who has not excluded gain on another home in that time � may exclude half the regular maximum amount, or up to $125,000 of gain ($250,000 for most joint returns). The proportion may be figured in days or months.
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