DEFINITION of 'Deferred Gain On Sale Of Home'

An obsolete tax law that applied to homeowners before May 7, 1997. The Deferred Gain on Sale of Home rule mandated that those who realized a capital gain on the sale of their residences could defer this gain if the sale proceeds were used to purchase a more expensive home. This tax deferral was called a rollover.

BREAKING DOWN 'Deferred Gain On Sale Of Home'

The Deferred Gain on the Sale of Home rule was superseded by the Tax Relief Act of 1997. The law now states that all homeowners can exclude up to $250,000 of capital gain on the sale of their residences from taxation unconditionally. Married couples filing jointly can exclude up to $500,000.

RELATED TERMS
  1. Deferred Tax Asset

    A deferred tax asset is an asset on a company's balance sheet ...
  2. Over-55 Home Sale Exemption

    An obsolete tax law that provided homeowners over the age of ...
  3. Deferred Tax Liability

    An account on a company's balance sheet that is a result of temporary ...
  4. IRS Publication 523

    A document published by the Internal Revenue Service (IRS) that ...
  5. Deferred Billing

    The act of charging buyers for their purchases, without interest, ...
  6. Deferred Month

    The latter month(s) of an option or futures contract. For example, ...
Related Articles
  1. Managing Wealth

    Understanding the Capital Gains Tax

    A capital gains tax is imposed on the profits realized when an investor or corporation sells an asset for a higher price than its purchase price.
  2. Taxes

    Will Your Home Sale Leave You With Tax Shock?

    Learn how the newest tax laws apply to the proceeds you earn.
  3. Retirement

    How Non-Qualified Deferred Compensation Plans Work

    These tax-advantaged retirement savings plans have their pros and cons, and employers and employees must follow strict guidelines.
  4. Taxes

    Use Tax Vs. Internet Sales Tax: How Are They Different?

    Learn about the differences between a use tax and an Internet sales tax. Find out about transactions in which the taxes apply, and to whom they apply.
  5. Managing Wealth

    Understanding Capital Gains

    Capital gain refers to the increase in value of a capital asset or an investment security upon sale. In other words, if you buy company stock, real estate or fine art and then sell it for more ...
  6. Managing Wealth

    The Best Part About Owning A Home: Tax Deductions

    There are many home ownership tax deductions you can take advantage of. Here are some of the ones you need to know about.
  7. Taxes

    Understanding Deferred Income Tax

    Deferred income tax is a liability on a balance sheet that reflects income tax that is allocable to the current period, but has not yet been paid.
  8. Investing

    Avoiding A Big Tax Bill On Real Estate Gains

    Installment sales allow sellers to defer taxes on real estate profits.
  9. Managing Wealth

    Buying a House? 6 Other Costs You Should Factor In

    When purchasing a home, you need to factor in more than just the list price of the home. From closing costs to maintenance, there are many other expenses.
RELATED FAQS
  1. How is a deferred tax asset taxed?

    Find out how the IRS and FASB treat deferred tax assets, which a company can recognize in order to reduce its future tax ... Read Answer >>
Hot Definitions
  1. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  2. Quadruple Witching

    The expiration date of various stock index futures, stock index options, stock options and single stock futures. All stock ...
  3. Co-pay

    A type of insurance policy where the insured pays a specified amount of out-of-pocket expenses for health-care services such ...
  4. Protectionism

    Government actions and policies that restrict or restrain international trade, often done with the intent of protecting local ...
  5. Fiduciary

    A fiduciary is a person who acts on behalf of another person, or persons to manage assets.
  6. Demonetization

    Demonetization is the act of stripping a currency unit of its status as legal tender and is necessary whenever there is a ...
Trading Center