When seniors opt to trade down help them maximize their tax savings by combining tax rules.
Many longtime homeowners are more than ready to trade down to something more manageable.
Unfortunately, if they've owned their existing home for many years or if they've traded up several times their accumulated gain and resulting income tax liability can be substantial. Trading down doesn't mean they lose the rollover. In fact, older homeowners can reduce or even eliminate the immediate income tax impact of trading down by combining the Internal Revenue Code's rollover provisions with the 55 and over exclusion provisions. Let's quickly review those two rules. Homeowners may have only one principal residence at a time.