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The over-55 home sale exemption was superceded by provisions in the 1997 Tax Reform Act.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. Foreign Housing Exclusion And Deduction

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

    A law designed to reduce the unnecessary payment of private mortgage ...
  4. Section 1202

    Section 1202 is a section of the Internal Revenue Code which ...
  5. Taxpayer Relief Act Of 1997

    One of the largest tax-reduction acts in U.S. history, this legislation ...
  6. Exemption

    A deduction allowed by law to reduce the amount of income that ...
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

    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.
  3. Investing

    Will You Break Even On Your Home?

    Calculate how much your property will need to appreciate to cover the costs of owning it.
  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. Personal Finance

    Mortgage Options for Underwater Homeowners

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

    How To Pay Taxes If You're Overseas

    Here is a step by step guide to paying taxes if you are a U.S. citizen living overseas.
  8. 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.
  9. Investing

    5 Worst U.S. Housing Markets

    If you are looking for a house, these tough markets might provide good prices and flexible sellers.
  10. Taxes

    New Tax Rules Target The Top Tax Bracket

    The American Taxpayer Relief Act brings about new tax rules for the wealthy that people such as Warren Buffett have been calling for over the last few years.
Hot Definitions
  1. Treasury Bill - T-Bill

    A short-term debt obligation backed by the U.S. government with a maturity of less than one year. T-bills are sold in denominations ...
  2. Index

    A statistical measure of change in an economy or a securities market. In the case of financial markets, an index is a hypothetical ...
  3. Return on Market Value of Equity - ROME

    Return on market value of equity (ROME) is a comparative measure typically used by analysts to identify companies that generate ...
  4. Majority Shareholder

    A person or entity that owns more than 50% of a company's outstanding shares. The majority shareholder is often the founder ...
  5. Competitive Advantage

    An advantage that a firm has over its competitors, allowing it to generate greater sales or margins and/or retain more customers ...
  6. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities ...
Trading Center