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Blog by Philip Jones

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THE CAPITOL’S LOSS IS YOUR CAPITAL GAIN

            THE CAPITOL’S LOSS IS YOUR CAPITAL GAIN

 

 

            One of the principal features of The Taxpayer Relief Act is that Uncle Sam takes less of the profits on your investments.  If you plan on selling your home and think that you will make a substantial profit, there is even more good news!

 

            The Jobs and Growth Tax Relief Reconciliation Act of 2003 lowered the capital gains tax rates from 20% to 15% for taxpayers in the higher income brackets and from 10% to 5% for taxpayers in the lower income brackets.  These rates apply to properties purchased on or after May 6, 2003.

 

            If you are selling your home, you can exclude up to $250,000 of your profit from taxes if you are single and $500,000 if you are married.  To qualify, the home must have been your principal residence for at least 24 months of the previous 60 months.  This provision may be used once every two years.  You only are required to pay capital gains tax on any amount in excess of the exclusions. Consult your tax advisor to consider your particular circumstance.

 

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