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Originally Posted by MI-Roger
And I read somewhere that profits from the sale of your existing home are not tax free if you use the proceeds to purchase into a CCRC. Still researching, trying to confirm or absolutely deny this statement. .......
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I had extra time today so I did some internet searching on this topic. There is an ElderLaw article available on the web which clearly states that home sales proceeds will lose their tax exempt status if used to purchase a CCRC.
However, I could find no other supporting articles or documents. Even the official IRS bulletin giving details regarding the tax exemption on home sale proceeds, and all the ways the sale may not be tax exempt, does not mention a CCRC purchase.
There is one gray area that could be interpreted either way. Only the first $500K of home sale proceeds are considered tax exempt if the home is titled to a married couple. This decreases to $250K if the home is titled to only one person. So a Widow or Widower could easily find themselves owing taxes on part of the sale. In higher priced parts of the country this will impact joint titled properties as well.
Our home is currently titled to my wife's Trust in an effort to equalize our individual wealth for estate planning purposes, meaning the exemption is likely $250K (or maybe $0 because it is owned by a Trust rather than an individual?) Our home's retail value is rapidly approaching the pre-recession highs and the $250K barrier may be breached in 10 years, so we may need to re-title the property before sale to not exceed the current limit. And there may be a minimum time period this title change needs to be in effect for the sale proceeds to be judged tax exempt by the IRS.
More stuff to find out.......