Posted on 10/23/2007 3:08:44 PM PDT by taildragger
Cap gains ARE the same for RE & stocks...the $250K/$500K is the “primary residence exemption”.
If this report is correct, “phantom gains” from the short sale of a mortgaged property will be exempt from income taxation.
Can’t tell from that article if this is for primary residences only, or all real property - if the latter it will help bail out flippers and developers, and will help clear the market of a lot of distressed “investment” properties.
OTOH, in either case holders of mortgage backed securities will be taking a considerable hit, and a lot of that paper is held by overseas investors, who will NOT be amused.
The way I understand this is this...
Lots of people defaulting on sub-prime loans. Defaulted loans are taxed as income.
Congress is considering changing this and removing the ‘taxable income’ delineation and letting the loan defaulters off the hook.
They know this will cost a great deal of tax revenue. sooooo, what is their plan?!
Give the pie in the sky home buyers a freebie and once again stick it to the responsible members of society.
The middle class?
Please....
If you live in the house for 1 year and sell, you’ll get a prorated amount... so for a married couple, you still get capital gains exclusion of $100,000. How many middle class families have homes that increase in value by $100,000 in a single year? If it increases in value by any amount less than that, they still would pay nothing in capital gains taxes....
From 2004 to 2006, the fastest growing area in median prices was Honolulu, increasing by $170,000 over 2 years.
Meaning the median home in the fastest growing market in the country still would not have been subject to capital gains taxes.
The national median price went from $195.2 to $221.9 in the same period. Meaning nationally, the median home would have been nowhere near having taxable gains.
If the median home is nowhere near experiencing taxable limits, how is it going after the middle class?
You said it - remember, her husband was the one that slapped us with the biggest retroactive tax increase in history.
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