Agent

Record-keeping pays off when selling home

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

DEAR BOB: My wife and I bought our first home in 1974 and have moved up several times, deferring our profit taxes under the then-current tax law. In 1995 we bought our present home and have kept careful track of our basis in the property dating back to our first home. Under the current tax law, does this matter? When we sell our residence, can we simply take the $500,000 principal-residence-sale tax exemption based on our purchase price of that residence? --Ira C. DEAR IRA: Congratulations on keeping excellent tax records. The now-repealed Internal Revenue Code 1034 "rollover residence replacement rule" applies to all your deferred capital gains from your prior principal-residence sales. Purchase Bob Bruss reports online. The easy way to estimate your capital gain on the sale of your current principal residence is to add up your deferred capital gain from the previous sales and then subtract that number from your current home's purchase price. Let's suppose those deferred home-sale...