Try 1 month for 99¢

Ms. Lank: Please explain the IRS requirements regarding one-time $250,000 tax exemption when the elderly sell their home. -- E. B. C.

Answer: The regulations you're asking about have been changed -- to the home sellers' advantage -- over the years.

The IRS no longer sets age limits on this tax break, so the homeowners needn't be elderly. It's possible to realize a tax-free profit of up to $250,000 -- twice that for a married couple filing jointly -- on the sale of a longtime principal residence. The only requirement is that it must have been the main home of one or both of the sellers for at least two of the five years before the sale. The two years need not even be consecutive.

Nor is this a one-time benefit anymore. It could be taken advantage of again if another principal residence were sold later with another tax-free profit of up to $500,000. It's available as often as every two years -- though it's not easy to picture a couple realizing a half-million dollar profit on the sale of a home they'd owned and occupied for just two years.

On the other hand, of course, one can't claim a capital loss if a main residence sells for less than it cost. The IRS feels that's like taking a loss when selling a used car, so there are no income tax consequences.

In the case of complicating circumstances -- divorce, death and included vacant land, for instance -- special tax treatment may apply. Details are available online in IRS Form No. 523. But at that point, one would probably be getting information from a lawyer or a CPA anyhow.

New House Inspection

Dear Ms. Lank: I just read the letter from the national-builder site agent regarding buyers who want to have a home inspection but are often not permitted to.

Builders have started to build 32 new homes across our street. The one thing we have learned from watching all this new construction is that they are putting homes together as quickly and cheaply as possible.

From what we've seen in the past few years, if we were going to buy a new home, I would want an inspection, if for no other reason than to make sure there aren't any possible problems.

It doesn't matter that the builder won't make any repairs or changes. We wouldn't want to spend that much money and regret it. It's really not any different than buying a car. You could always get a lemon. -- askedith.com

Answer: But let's say your inspector were to find something your builder wouldn't remedy. Would you really be free to drop out at that point? What about the contract you had signed in the first place? Let's hope you had your own lawyer involved right from the start.

Your note brought back memories about when we bought a house in this development, not long after World War II. The village gave our builder a hard time because he was from out of town, and because he was using new time-saving techniques that were considered shoddy.

I particularly remember how upset people were because instead of plastering walls, the builder was tacking up this new drywall plasterboard. We worried about whether it would last, but new construction was still way behind post-war demand, so we kept our valuable spot in the waiting line.

And our walls are just fine today, more than 60 years later. Let's hope some of your concerns are just unfamiliarity with newer building practices.

Jet-Fuel Pipe

Dear Edith: Can you send me information on easements? I would appreciate you sending info as soon as you can.

This company wants to buy an easement on our property to put electric stakes in the ground and prevent the corrosion of a pipe that runs along our property. We don't know if this is a good thing or not. This pipe is a jet fuel pipe that runs to the nearby air field. -- S. Q.

Answer: An easement gives someone the right to use your property for some purpose. It might, for example, allow a right of way so your neighbor could get to his land.

This time, don't bother seeing a lawyer. Just give the company the easement, as soon as possible.

Contact Edith Lank at www.askedith.com, at edithlank@aol.com or at 240 Hemingway Drive, Rochester NY 14620.

COPYRIGHT 2018 CREATORS.COM

Subscribe to Breaking News

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.
0
0
0
0
0

Load comments