I'm guessing Wayno is going to continue to avoid this. Good post Smurph.
Is an interesting point Gary--as far as I can tell the only way statement would be correct--is if the Dems were wanting to repeal -Taxpayer Relief Act of 1997-which I can find no evidence of--even if so it was not presented that way on comparison so would agree we should flag it as deceptive--unless proven otherwise--here is best answer I found on it--
Retired Homeowner's Question
Can Going Backwards Help Me Go Forward Now?
The kids are gone, the house is empty and you've now got time to spend life how you want. For some that's downsizing to a smaller place, for others that's buying a mountain or lake retreat.
For many people, their home is their biggest asset. And, if your home has appreciated in value and you're well on your way to getting your mortgage paid off, this could, in fact, be the case. However, you will still need to live somewhere and will need to plan for how to convert some of that asset into money for retirement.
And, you need to ask yourself if you really want to move out of the family home. Many retirees have made the choice to stay put and enjoy living where they have for years - in communities where they've solidly established roots, among lifelong friends and family. Others find that they need to hold on to their larger home in order to accommodate grandchildren or parents who need their support.
However, it's true that the equity you've built up in your home could provide for you in your retirement years. There are certainly options.
? The Decision To Downsize
? 15 Year Mortgages And Other Financing Options
? Reverse Mortgages
? How Does A Reverse Mortgage Work?
The Decision To Downsize
Downsizing has become an increasingly popular trend, particularly with baby boomers whose children are out on their own and who have extra room they don't need. Some even make the choice so the kids don't have the comfortable option of moving back. Not only can this free up capital for you to invest, but the costs of a smaller home, townhouse or condominium can help reduce other expenses as well (upkeep, property taxes, utilities and the like). Downsizing can also mean moving to a less expensive part of the country or a smaller community where living expenses are less - maybe it even means moving to a second home where you've spent your vacations.
In the past, homeowners only had two ways to avoid capital gains on the sale of their primary residence. Section 1034 allowed home sellers to avoid capital gains tax as long as they purchased a more expensive home, often forcing a purchase of more house than necessary. The other, Section 121, allowed a once- in-a-lifetime $125,000 exclusion on capital gains which often went unused due to saving it for the right time.
Today, that's changed. Thanks to the 1997 Taxpayer Relief Act, married taxpayers filing jointly can exclude up to $500,000 of gain on the sale of a home, and single taxpayers can exclude up to $250,000 of gain - even if the old one-time exclusion has been taken. Homeowners are allowed to take the exclusion once every two years, and as of May 1998 there is no cap on how much total gain can be excluded during a lifetime. To qualify the home must be your primary residence for two of the last five years.
Among the groups benefiting from cashing-in on their equity while avoiding a major tax bite are empty nesters and retirees who can now downsize or rent. As with all tax, legal or real estate matters, you should consult with a professional regarding your own specific situation.
http://www.rbccentura.com/solutions/home/retired_owner.html
