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There’s no tax place like home

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in Small Business Tax,Small Business Tax Deduction Strategies

Q. I’m selling my home for $800,000 and downsizing. Am I still eligible for any rollover tax deferral? S.K., West Islip, N.Y.

A. Even better. The old “sale-and-replacement” tax break for homes is ancient history, but you may benefit from a tax exclusion of up to $250,000 of gain for single filers and $500,000 for joint filers. There’s no requirement to buy another home. To qualify, you must have owned and used the home as your principal residence for at least two out of the five years preceding the sale. Any excess is taxed as a capital gain, up to a maximum 20% rate for a long-term gain.

Tip: In extenuating circumstances, you may qualify for a partial exclusion.

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