Tax Implications

You are already thinking... "What will I owe to Uncle Sam for taxes when I sell my Oakland County home, Wayne county home, or any Michigan home.

The general rule of thumb is that if you sell your primary residence, you typically can exclude a gain of as much as $500,000 if you're married and filing a joint return with your spouse (or $250,000 if you're single or married filing separately) and meet certain conditions.

To be eligible for the full exclusion, you typically must have owned the home -- and lived in it as your principal residence -- for at least two of the five years prior to the sale. These exclusion amounts aren't indexed for inflation. (When calculating your cost basis, don't forget to include additions and other "improvements," such as a new roof, deck or heating system. However, this subject -- and other adjustments you may need to make -- can be tricky. For details, see IRS Publication 523.)

Remember this is not a one time exclusion.  You can do this every two years if you meet the rules and guidelines

Remember this is only for your principal residence and not for vacation homes or rental properties..

Remember also the $500,000 exclusion is only for married couples filing jointly.  Otherwise it is $250,000 for single people.

There are some circumstances that the allow you to take the exclusion if you have not lived in the house for two years. And what are these "unforeseen circumstances"? Congress didn't define them in the 1997 law. But Treasury officials later issued detailed regulations offering numerous examples. Among them: divorce or a legal separation, multiple births from the same pregnancy, or the loss of your job. You may even qualify for a reduced exclusion if you or your spouse changes jobs and takes a pay cut that results in an inability to pay housing costs and reasonable basic living expenses.

Let's say you bought your Livonia home 4 years ago, you are married filing jointly, and paid $250,000 for it.  It went up in value to $750,000.  (What an increase)  You do not owe any capital gains on it! 

Whether you buy Wayne County real estate, Livingston county real estate, or Oakland county real estate the rules are the same.  But always consult with you tax preparer, CPA to confirm you meet the exclusion rules.