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The good, bad and ugly of tax code changes for 2009.

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Real Estate Agent with Gold Coast Realty

  The good: So far, the current 15% max tax rate for capital gains isn't scheduled to expire until the end of 2010, unless Congress changes it.  However, even better, if your income is low enough, you can pay as little as 0%.  That was done to help retired persons, emancipated minors and the self employed who had a bad year and sold stock and mutual funds to help keep their businesses afloat. (I'm not sure if anyone still has capital gains on any stock, but for those who do it's a great tax advantage.)  The bad: Previously you could exclude gains upon sale of your principal residence of $250,000/$500,000 if you lived there 2 of the last 5 years. Many people figured this out and moved around to thier vacation homes, rentals, etc to take advantage every 2 years of this tax break. Oops, someone got wise to this and the law has now been changed. If you sell your principal residence that was previously a vacation home or rental, the gain may no longer excludable from income taxes...depending. For example, if you rented your home for 3 years, moved back for 2 years, only 40% of the gain is excludable. There are exceptions. If you're thinking about doing this contact a tax professional please!!  The ugly: Good grief, they are taxes!! Nothing's good about paying them!  Well, to be fair, clean water, schools, good roads, dams and sewers are necessary in today's world.  So taxes..."can't live with ‘em, can't live without ‘em."

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