Most of my clients profit from selling their homes, and they often have questions about capital gains tax. When you sell your primary residence, you are not taxed on your profit if (1) you have lived in the home for two out of the last five years and (2) your gain does not exceed $250,000 as a single taxpayer or $500,000 as a married couple filing jointly. Gains above these limits are taxed at the current rate of 15% for higher income taxpayers and 5% for lower income taxpayers. In 2008 the 15% rate will continue for higher income taxpayers; while the 5% lower income rate will drop to 0% for the 2008 tax year only. On January 1, 2009, the long-term capital gains tax rates will once again be 15% and 5% through 2010. Homeowners can use this tax-free provision every two years. As set forth in the American Job Creation Act of 2004, properties converted from a 1031 exchange property into a primary residence must be held and used as a primary residence for at least five years to qualify for the tax exemption. Consult your tax accountant for more detailed information regarding your particular circumstance.

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Craig Alexander
Weichert Realtors
824 John Marshall Highway
Front Royal, Winchester, Strasburg and Luray, VA. 22630
Cellular: 540-671-6082
Home Office: 540-933-6964
Fax: 540-301-0791
Voice Mail: 540-635-1300 ext. 131
Email: craigalexander@NUMBER1EXPERT.com
Email: craig@mris.com

Born and raised in the Front Royal area, I began practicing real estate in 1990. I offer a wealth of information about the area, including Front Royal, Warren County, Winchester, Frederick County, Flint Hill, Rappahannock County, Strasburg, Shenandoah County and Luray, Page County. A top producer in the region with over 450 closed transactions since 1997, I provide the best service possible to my customers and clients and have been recognized as one of the Top 5% Realtors nationwide for the past 7 years.