Office Tax Max

Financial Planning, November, 2006 by Julian Block

Although the real estate market has cooled substantially, there are still plenty of people looking to sell their homes. If those sellers are already writing off their homes as business offices, there are tax rules that make it easier for them to exclude profits. As advisors know, the tax code permits home sellers to "exclude"-meaning they pay no taxes on-profits of as much as $250,000 for those who file single returns or married couples who file separate returns, and $500,000 for married couples who file joint returns.

Sellers with profits that exceed the exclusion ceilings must pay taxes. To qualify for the exclusion, the home sold must have been owned and used as a principal residence for at least two years out of the five-year period that ends on the sale date. As tax...

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