This newsletter will highlight some of the changes which I believe are most important to you. Uncle Sam tried to change that saying with the Taxpayer Relief Act of 1997. The new estate tax law provides for an increase in the estate tax exemption amount. Therefore, as you can see, you will not receive the full benefit of the personal exemption unless you survive until the year 2006. Possibly the change to the capital gains tax for the sale of principal residences will have the greatest immediate income tax impact.
Losses are still non-deductible.
There is no minimum age requirement to take advantage of the new law. Both spouses must have used the house as a principal residence for at least two of the previous five years. The changes to the capital gains laws are somewhat more complex than the rules of selling a principal residence. Now there is a mid-term gain, as well as different rates for assets purchased after the year 2000. A short-term gain is still a gain on the sale of a capital asset which was owned for less than a year.