What is the 'Over-55 Home Sale Exemption'

The over-55 home sale exemption is an obsolete tax law that provided homeowners over the age of 55 with a one-time capital gains exclusion. Individuals who met the necessary requirements could exclude up to $125,000 of capital gains on the sale of their personal residences. The exclusion was intended to stimulate the real estate market and reward homeowners for their purchase and subsequent sale.

BREAKING DOWN 'Over-55 Home Sale Exemption'

The over-55 home sale exemption was superceded by provisions in the 1997 Tax Reform Act. This act raised the amount of excludable gain to $250,000 per taxpayer, and also allowed for more than one exclusion per taxpayer per lifetime.

RELATED TERMS
  1. Deferred Gain On Sale Of Home

    An obsolete tax law that applied to homeowners before May 7, ...
  2. IRS Publication 523

    A document published by the Internal Revenue Service (IRS) that ...
  3. Foreign Housing Exclusion And Deduction

    An allowance for taxpayers who live and work in a foreign country ...
  4. Homeowners Protection Act

    A law designed to reduce the unnecessary payment of private mortgage ...
  5. Tax Exempt

    To be free from, or not subject to, taxation by regulators or ...
  6. Section 1202

    Section 1202 is a section of the Internal Revenue Code which ...
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. Taxes

    Is It True That You Can Sell Your Home And Not Pay Capital Gains Tax?

    Based on the Taxpayer Relief Act of 1997, if you are single, the first $250,000 you make on your home sale is not subject to capital gains tax.
  3. Taxes

    Are You Missing Out On These Tax Exemptions?

    To lower your tax bill, make sure that you're taking all the exemptions that apply to you.
  4. Taxes

    A Tax Primer for Homeowners

    Go beyond interest and find out how mortgage points affect your taxable income.
  5. Financial Advisor

    5 Top Tax Concerns Clients Face

    Clients of advisors may have more tax issues as their financial plans become more complicated.
  6. Taxes

    8 States With Estate Taxes

    Understand the difference between the federal estate tax and state-specific estate taxes. Learn about some of the worst states with estate taxes.
  7. Personal Finance

    Mortgage Options for Underwater Homeowners

    Find out what options are available when your mortgage is greater than the value of your home.
  8. Investing

    4 Overlooked Homeownership Costs

    Mortgage payments aren't the only expense. Find what else you'll be on the hook for.
  9. Taxes

    Do You Have to Pay Taxes on Home Sales?

    Taxes are only paid on home sales if your proceeds exceed a certain amount.
  10. Investing

    Homeowners Overestimating the Value of Their Homes

    A new survey by Quicken Loans shows homeowners often have a lofty expectation of their home's value.
Hot Definitions
  1. Fintech

    Fintech is a portmanteau of financial technology that describes an emerging financial services sector in the 21st century.
  2. Ex-Dividend

    A classification of trading shares when a declared dividend belongs to the seller rather than the buyer. A stock will be ...
  3. Debt Security

    Any debt instrument that can be bought or sold between two parties and has basic terms defined, such as notional amount (amount ...
  4. Taxable Income

    Taxable income is described as gross income or adjusted gross income minus any deductions, exemptions or other adjustments ...
  5. Chartered Financial Analyst - CFA

    A professional designation given by the CFA Institute (formerly AIMR) that measures the competence and integrity of financial ...
  6. Initial Coin Offering (ICO)

    An Initial Coin Offering (ICO) is an unregulated means by which funds are raised for a new cryptocurrency venture.
Trading Center