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New Tax Laws Mean Big Benefits for Homeowners

Along with its special provisions for parents and investors, the federal Taxpayer Relief Act of 1997 provides a number of tax advantages for home buyers and sellers. Here are some of the benefits we believe you can realize from this legislation.

• You can scale back your housing tax fee before reaching the age of 55. The law allows you to exclude up to $250,000 in capital gains per transaction on the scale of you home ($500,000 for a married couple) regardless of your age - as long as you meet some very specific requirements of the law.
• Transferees may be able to avoid capital gain tax problems when moving from highly-appreciated real estate markets to lower cost areas - and pocket the difference.
• Home sellers can use the proceeds from the sale of one home to purchase two less-expensive houses. This can come in handy when looking for vacation property.
• With careful advance planning, you can also exclude the gain from the sale of more than one home.
• If you're a first-time buyer, you can withdraw up to $10,000 (the lifetime total) from a qualified retirement program penalty-free to use as the down payment.

NOTE: The new law is complex and subject to interpretation, we strongly recommend that you consult your tax advisor for full details before you take any action.

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