Tucson Real Estate Agent - Brenda O'Brien
8540 N. Oracle Rd.
Oro Valley, AZ 85704
Office: 520-918-5968
Toll-Free: 888-825-8251 ext. 5968
Fax: 520-989-6114
email: Brenda@BrendaOBrienTeam.com

     
TUCSON HOME SALE – CAPITAL GAINS TAXES

If you owned and lived in your Tucson Home for two years, the law is clear:

You can exclude from profit up to $250,000 if you are single or $500,000 if you are married and file a joint return.

But what if you have made a profit on your Tucson Home, and sell it before the magic two years spelled out in the tax law?

When Congress enacted this exclusion legislation, it had absolutely no idea that the real estate market would be so hot, or that so many homeowners would make profits on their home sales, even if they did not own their property for the full two years. However, Congress did provide reduced exclusions, if prior to holding the property for the full two years, the homeowner had to sell due to a change in employment, health reasons or “unforeseen circumstances”.

For over five years, taxpayers were in the dark as to what the IRS would consider as “unforeseen”. Finally, effective December 24, 2003, the IRS issued temporary regulations, dealing with home sales within the two year period. According to the IRS, they have established certain “safe harbors”. If the taxpayer falls within one of these safety zones, they will automatically be entitled to the appropriate exclusion of gain. Here are some of the new, but temporary, “safe harbors”:

Employment: If the new place of employment is at least 50 miles father from the residence sold than was the former place of employment, the homeowner who sells their home to be closer to work can take a 'proportionate' exclusion of gain. For example, if the homeowner owned the home for only one year, that homeowner would be entitled to exclude half of either the $250,000 or the $500,000 exclusion, depending on the marital and tax filing status of the taxpayer.

Health: if a doctor recommends a change of residence for reasons of health, this will be a safe harbor under the new temporary regulations. What determines “health”? According to the IRS, “if the taxpayer’s primary reason for the sale is (l) to obtain, provide, or facilitate the diagnosis, cure, mitigation, or treatment of disease, illness, or injury... or (2) to obtain or provide medical or personal care for a qualified individual suffering from a disease, illness or injury.” It should be noted that “qualified individuals” includes family members who are in need of medical assistance away from the principal residence. The IRS made it clear, however, that a sale of the family home merely because it is beneficial to the general health or well-being of the taxpayer will not fall within the safe harbor.

Unforeseen Circumstances: The IRS has provided that the following events would be considered “safe harbors”, on the condition that these events involve the taxpayer, his/her spouse, co-owner or a member of the taxpayer’s household:

1. Death;
2. Termination from employment and thus eligiblity for unemployment compensation;
3. Change of job status that results in the taxpayer being unable to pay the mortgage and reasonable basic living expenses for the taxpayer’s household;
4. Divorce or legal separation;
5. Multiple births resulting from the same pregnancy;
6. Involuntary conversion of the property -- such as a condemnation by a governmental authority, and
7. Destruction of the property because of a man-made disaster, an act or war or terrorism.

These regulations can be applied retroactively. Even if you sold your Tucson Home after May 7, 1997 and have already filed a tax return for the year in which the sale took place, you have the right to file an amended tax return.
Taxpayers who believe that they are entitled to claim an exemption because they fall into one of these safe harbors should immediately consult their tax advisors.

As Always, Check with your own personal Tax Professional!
The rules are quite complicated and can change at any time.

Tucson Home Finder, Virtual Search for Tucson Homes Tool
Tucson
Home
Finder
Tucson Community Information, Links to dining, shopping, entertainment and more
Tucson
Community
Info
Tucson Relocation Package, Free Tucson information, Available upon request
Tucson
Relocation
Package
Top Tucson Realtor Brenda OBrien
All
About
Brenda
Tucson Home Buyers Center, Information important to Tucson Home Buyers
Tucson
Home
Buyers
Tucson School Info, Schools, District Maps, Tucson School Report Cards
Tucson
Schools
Info
Tucson Golf, Tucson Golf Courses
Tucson
Golf
Courses
Tucson Home Sellers Info, Current Market Conditions, How to Price your Home, etc
Tucson
Home
Sellers
Tucson Market Report
Tucson
Market
Report
Brenda's Tucson Home Listings
Brenda's
Tucson
Listings
Tucson Condos and Townhomes
Tucson
Condos &
Town Homes
Tucson Helpful Links, Utilities, Maps, Relocation, Home Improvement, News Media, etc
Helpful
Tucson
Links
Tucson News
Monthly
Tucson
Newsletter
What People Say About Brenda, Client Testimonials about Tucson Realtor Brenda O'Brien
What
People
Say
Tucson Home Values, What's my Tucson Home worth today?
What's My
Value
Today
Tucson Home Mortgages and Tucson interest rates
Tucson
Home
Mortgages
Tucson New Home Information
Tucson
New
Homes
Oro Valley Homes
Oro
Valley
Homes
Tucson Homes by School District
Homes By
School
District
Catalina Foothills Homes
Catalina
Foothills
Homes
Rancho Vistoso Homes
Rancho
Vistoso
Homes
Tucson Homes - Age Restricted
Tucson
Retirement
Homes
Tucson Luxury Homes
Tucson
Luxury
Homes
Tucson Golf Homes
Tucson
Golf
Homes
Tucson Gated Homes
Tucson
Gated
Homes
Tucson Homes - Northwest
Northwest
Tucson
Homes
Tucson Homes - Other Areas, Other Styles, Homes with acreage, Homes with Guest Quarters, Etc
Other
Tucson
Homes

eMail Brenda
Tucson MLS - Invest Your IRA - Tucson Weather - Site Map - Tucson Map - Email This Page
Saddlebrooke - Sun City Vistoso - Heritage Highlands - Vistoso Village - Quail Creek
Dove Mountain - Continental Ranch - District 16 Homes - Sam Hughes District
Tucson Horse Property - Rancho Sahuarita - Rita Ranch - Vail
Tucson Utilities - Tucson Subdivisions - Tucson Resources
Long Realty #1 Tucson Realtor 2005 - Link to Me
Tucson Real Estate Home Page
Tucson Homes For Sale
Tucson Arizona


tucson mls logo
Copyright ©1999-2016 All Rights Reserved

Copywrite Protected