"According to a new National Association of REALTORS report, 11.5% of Arkansas homeowners have gained enough equity to exceed the $250,000 federal capital gains exclusion limit for single filers."
"Under current law, homeowners can exclude up to $250,000 in profit when selling a primary residence-or $500,000 for married couples. The policy was established in 1997."
"If those caps had been adjusted for inflation, they'd now be roughly $660,000 and $1.32 million. Instead, many Arkansans are finding themselves subject to capital gains tax."
"This tax burden often catches longtime Arkansans off guard as they realize their home's value appreciation has turned into a costly liability upon selling."
A federal capital gains rule has not been updated in over 25 years, leading to unexpected tax burdens for many Arkansas homeowners selling their properties. 11.5% of homeowners exceed the $250,000 exclusion limit for single filers, with 1.37% surpassing $500,000 for joint filers. The exclusion limits established in 1997 remain unchanged despite home prices surging over 260%. Homeowners in Arkansas face both federal and state capital gains taxes, significantly affecting the affordability and feasibility of selling appreciated homes in the region.
Read at SFGATE
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