In Fiscal 2020 we had clients who sold their home and did not prepare for the tax consequences.
What was the most surprising was the fact that two or maybe three clients all claimed that they rolled the funds into a bigger home and so the profits should not be taxable. That law expired in 1997, the fact that it was being requoted after 20 years was really interesting, since the people who brought it up were Millennials.
When you sell your home if you haven’t sold your primary residence in the last five years and you lived 2 out of the last 5 years in the home sold. You can get a exemption of $250,000 for single and $500,000 married filing jointly.
This was not the case with those who were claiming the roll over dollars. They had just jumped into the bigger home and took their exemption already. They were looking at a large tax bill. Unfortunately quoting old tax law does not count to reduce your tax bill…