Thursday, May 05, 2005

Something to Think About

With the rocket rise in prices over the past few years many homeowners are left holding a treasure chest of equity in their homes. That's great, right? Of course, it is. However, if they are thinking of moving, for whatever reason, the $250,000 gain for a single homeowner, and $500,000 gain for a married couple may not be enough to stop them from needing to pay both federal and state capital gains. Gains in some areas have put many homeowners well over that threshold. Some homeowners are choosing to to do 1031 tax deferred exchanges. They are converting their principal residence to a rental, and at some later date, selling their home and purchasing a new home in a 1031 tax deferred exchange. The new home is then rented for a period of time (usually a minimum of 6-12 months) and then converted back to a principal residence. If you are thinking of doing this, check with your tax specialist for all the details.

www.HopeGoss.com

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