House-hoppers May Suffer under new tax rules

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Real Estate Agent with CB Select Real Estate at Lake Tahoe - 775.691.3855 - DRE: NV28254 CA01139667

I just received a short version of the Housing package the president recently and part of the stimulus package could reduce but not totally eliminate the tax saving strategy used by home hoppers.  This doesn't affect the vast majority of homeowners, it sure will have some affect on people planning to sell their primary residence, claim the full home-sale exclusion which then reduces or eliminates capital gains taxes, then move to a second or third home owned for some time and convert that into the primary residence.  Then later sell it and again pay little or no capitol gains tax.  In my market this is a pretty common practice, even done by real estate agents.  This will plug a tax loop long looked at by congress.

This will likely complicate tax returns as well for poeple who will convert homes from one catigory to another.  You can find the details in the Wall Street Journal August 6, 2008.  Also go to www.jct.govand look for publication JCX-63-08 dated July 23, 2008.

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 Ken Cash,  CRS

Coldwell Banker-Nevada

Century 21-California

 

KenCash@TahoeLiving.com

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www.Century21MountainProperties.com

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Coldwell Banker Select Real Estate of Lake Tahoe - Nevada

Century 21 Tahoe Resort Properties-California

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