Deferred Gain On Sale Of Home

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The Deferred Gain on the Sale of Home rule was superseded by the Tax Relief Act of 1997.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. Tax Deferred

    Investment earnings such as interest, dividends or capital gains ...
  2. Deferred Billing

    The act of charging buyers for their purchases, without interest, ...
  3. Deferred Charge

    A prepaid expense that is treated as an asset on a balance sheet ...
  4. Deferred Account

    An account that postpones tax liabilities until a future date. ...
  5. Deferred Income Tax

    A liability recorded on the balance sheet that results from income ...
  6. Use Tax

    A sales tax on purchases made outside one’s state of residence ...
Related Articles
  1. Taxes

    Will Your Home Sale Leave You With Tax Shock?

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

    Benefits of Deferred Compensation Plans

    Understand the difference between a qualifying or nonqualifying deferred compensation plan. Learn about the benefits of a deferred compensation plan.
  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. Investing

    Deferred Tax Liability

    Deferred tax liability is a tax that has been assessed or is due for the current period, but has not yet been paid. The deferral arises because of timing differences between the accrual of the ...
  5. Credit & Loans

    Student Loan Deferment: Live to Pay Another Day

    Extending your principal repayment date can increase your chances of fighting off default.
  6. 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.
  7. Economics

    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. Taxes

    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.
  9. Investing

    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 ...
  10. Taxes

    Claim The Homebuyer Tax Credit Before It Expires

    This credit expires April 30, but you can still cash in, and buying a house isn't the only way to do it.
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 >>
  2. Will I pay capital gains tax on the profits from the sale of my home?

    I am single and have lived in my house for 30 years. Does it make a difference if I rent or buy after selling the house? ... Read Answer >>
  3. How do I calculate the capital gains tax on the sale of my house?

    I'm thinking of selling my first house, but I just learned that I might have to pay capital gains taxes. I wanted to ... Read Answer >>
  4. Is there a capital gains tax on the sale of our home if we use the profit towards ...

    Since my job reduced my hours and uncertainty of income, we might have to sell our home. We would like to put the profit ... Read Answer >>
  5. What's the difference between a grace period and a deferment?

    Learn the difference between grace periods and deferments and when each type of delayed-payment period applies to various ... Read Answer >>
  6. What's the difference between short sales and foreclosures?

    Understand the difference between a short sale and a foreclosure; both result in the loss of a home, either through a sale ... Read Answer >>
Hot Definitions
  1. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  2. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  3. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  4. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  5. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  6. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
Trading Center