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Home sellers strategize to postpone capital gains taxes

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

DEAR BOB: Regarding that $250,000 ($500,000 for a married couple filing jointly) home-sale tax break, what about the taxes that would have been due on deferred gains from sales of prior principal residences? My wife and I bought and sold a total of four principal residences over the years, for a total deferred capital gain of about $300,000. Will that amount reduce our $500,000 exemption when we sell our current home? – George F. DEAR GEORGE: The Internal Revenue Code 121 principal residence sale exemption up to $250,000 (up to $500,000 for a qualified married couple filing jointly) applies to both your deferred capital gains from prior home sales (under now-revoked Internal Revenue Code 1034) and your current home's capital gain. Purchase Bob Bruss reports online. Your $300,000 total deferred capital gains from prior principal residence sales should be subtracted from your current home's purchase price to arrive at its adjusted cost basis. To this amount, add the cost of any cap...