If you are thinking of selling your home and your house has risen in value since you purchased it, or you have accumulated a lot of deferred profit from previous sales, the Taxpayer Relief Act passed in 1997 could be of tremendous value.

Prior to this law, when a homeowner moved to a smaller home, relocated to a less costly area, or made a decision to rent, they were left with unfavorable tax consequences. The old tax law allowed people who sold their homes to defer tax on any profit by buying a replacement home of at least equal value within two years. At age 55, they could permanently escape tax on up to $125,000 of profit, but any profit in excess of that amount was taxable unless a new home was bought.

The good news is that with homes sold after May 6, 1997, homeowners can make as much as $500,000 tax-free profits on the sale of a principal residence for joint filers or $250,000 for single filers. The $500,000 capital gains exclusion removed taxes as a consideration for most home sellers by giving them flexibility to trade up or down. It has also allowed homeowners to preserve the savings value of a home when they sell, provided they use the property as their principal residence for two of the prior five years prior to the sale.

Consult your tax advisor for your particular circumstance.

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Becky Brosh
Edgewater Realty LLC
PO Box 70
Granby, CO 80446
970-531-0704
Fax: 970-887-1338
beckybrosh@BestImageAgent.com

A deep appreciation for the privilege of living, working and playing in the majestic Rocky Mountains has made it possible for me to enjoy a career assisting buyers and sellers with their real estate needs in Grand County since 1997. It is a true pleasure to be a part of the process of a family securing their dream home, to work with investors taking advantage of the market, and to volunteer in the community. In addition to having served as President of both the Grand County Board of Realtors and the Grand County Builders Association, I have been named the 2009 Grand County Realtor of the Year.

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