Tax Geek Tuesday: You sold your house — is the gain taxable?
Congress has long encouraged home ownership through the Internal Revenue Code, whether through deductions for mortgage interest or real estate taxes or the exclusion of gain upon the sale of a principal residence. Prior to 1997, the exclusion upon sale came as two options: the first in the form of a "rollover;" if you sold your home and reinvested the proceeds into a new one, you were permitted to defer the gain on the sale by carrying over the basis of the old home into its replacement. Alternatively, if you were 55 or older at the time of sale, you could take advantage of a "one-time only" permanent exclusion of up to $125,000 of gain.
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