Property owners are in for a surprise if they have used their personal residence in the past for rental or investment purposes. The tax free allowance of $250,000 per person when a property owner sells their personal residence is reduced if the personal residence was a rental or investment property before it was their personal residence.
The changes were included in the Housing Act of 2008 and modify Section 121 of the tax code.
The amount of taxable gain applied toward the time period that the property was held for rent or investment will no longer be tax free. The amount of taxable gain applied toward the time period that the property was held as the property owner's personal residence will still qualify for the tax free deduction.
Learn more about the modifications to Section 121 under the Housing Act of 2008.
Wednesday, August 13, 2008
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