Most of my clients profit from selling their homes, and they often have questions about capital gains tax. When you sell your primary residence, you are not taxed on your profit if (1) you have lived in the home for two out of the last five years and (2) your gain does not exceed $250,000 as a single taxpayer or $500,000 as a married couple filing jointly. Gains above these limits are taxed at the current rate of 15% for higher income taxpayers and 5% for lower income taxpayers. In 2008 the 15% rate will continue for higher income taxpayers; while the 5% lower income rate will drop to 0% for the 2008 tax year only. On January 1, 2009, the long-term capital gains tax rates will once again be 15% and 5% through 2010. Homeowners can use this tax-free provision every two years. As set forth in the American Job Creation Act of 2004, properties converted from a 1031 exchange property into a primary residence must be held and used as a primary residence for at least five years to qualify for the tax exemption. Consult your tax accountant for more detailed information regarding your particular circumstance.

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Greg James and Neil Castellane
William F. Hilton Realty
PO Box 5641
Hilton Head Island, SC. 29938
Phone: 843-785-4700
Fax: 843-785-8843
Email: realestatehiltonhead@NUMBER1EXPERT.com

Greg James has been in the real estate business for over thirty years. He is the sole Owner, President, and Broker-in-Charge of his company and has currently brought aboard eight Sales Associates......Neil Castellane, Greg's Associate, is also a Licensed Real Estate Agent, a Realtor®, and an Accredited Buyer's Representative. Call or email us today!

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