Propose changes may mean owing taxes when selling your home

There are generous tax breaks for selling you home so you do not pay taxes. The tax breaks for selling your home are not as generous in the proposed tax reform.

Currently, you can exclude gains up to $500,000 for married couples and $250,000 for others. The other requirement is that you must live in the home 2 out of the last 5 years. You can use this exclusion once every 2 years. Most people selling their home take advantage of this tax exclusion.

Tax reform proposal changes the home gain exclusion requirements. Excluding gains up to $500,000 for married couples and $250,000 for others stay the same. However, 2 out of last 5 year rule changes to 5 out of 8 years. You will need to live in your home at least 5 out of the last 8 years. In addition, you can use this exclusion once every 5 years. This is a big change for those that move more frequently or have purchased two homes within a short period.