Are you moving from Preston Hollow or the Park Cities, thinking of downsizing, and have a concern about a capital gains tax?
Here are simple guidelines to remember:
If you are married, and file a joint return, the tax law excludes $500,000 on any gain you make on the sale of your principal residence.
You MUST have lived in the house for 2 out of the last 5 years before the sale.
If you are single, you can exclude up to $250,000 of your profit. If you are a surviving spouse, you can claim the $500,000 exclusion, IF the house is sold within 2 year from the date of death.
It is always important to keep records of all capital improvements made to the house over the years. Any capital improvements can add to the base value of the property which could reduce the profit realized on a sale, and help keep the profit within the tax cap. Additionally, there are other possibilities for reducing a taxable gain on a sale, in the event of the death of a spouse.
Always check with your Realtor & personal tax professional, but knowing these simple guidelines will help you plan a move in your future.
Hanne Sagalowsky / email@example.com / 214-402-8200 / International Property Specialist