Real estate is heating up again. And that means planning for gain when you sell.
That’s why today’s question is so timely:
“I may be selling my home and buying a new one. Is there a way to title the home (trust / LLC / ?) to avoid transfer issues later (inheritance and also Obamacare confiscations to pay medicare) ?”
There is one big benefit when it comes to selling your principal resident. If you’ve owned the house and lived in it for the previous 5 years, you get a gain exclusion of up to $250,000 if you’re single or $500,000 if you’re married, filing jointly on your return.
Temporary absences that total less than 2 years don’t count.
One thing to be VERY careful of right now is information on the Internet. The laws for primary residence deduction changed in 2009 and unfortunately there is still an old 2 out of 5 year rule floating around.
Check out the blogs here next week for the complete rules on what it takes to exclude capital gains when you sell now. Don’t trust the Internet if the article isn’t written by a true tax professional.