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Chapter 6. Income Taxes > Tax Relief as Big as a House

Tax Relief as Big as a House

The home is most often the most valuable asset that an individual or a married couple owns. The sale of that home, which in many circumstances was bought years earlier for a very low price, could have dire tax consequences. Fortunately, over the years, a number of tax laws have reduced the problem of taxation of the profit on a home sale. Since 1997 individual taxpayers have been able to exclude $250,000 from capital gains taxes, and married couples have been able to exclude $500,000 from capital gains taxes otherwise incurred on the sale of their primary home in which they have lived for at least two of the five years before the sale.

If you have put your home into a living revocable trust with yourself as both trustee and beneficiary of the trust, you can still take advantage of the $250,000 or $500,000 exclusion from capital gains taxes.



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