22.5% of Homeowners in Alaska Will Face a Hidden Home Equity Tax If They Sell
Briefly

In Alaska, homeowners, many of whom have owned properties for decades, are encountering unexpected capital gains taxes when selling their homes due to outdated profit exclusion limits. Recent data indicates that 22.5% of homeowners exceed the $250,000 threshold for individuals, with 2.7% surpassing the $500,000 cap for married couples. These limits have remained unchanged since 1997, despite a significant rise in home values. As a result, sellers must contend with substantial federal taxes, reducing their overall profits, particularly impacting older homeowners.
Long-term homeowners in Alaska face capital gains taxes, with 22.5% exceeding the $250,000 exclusion for individuals, a limit not updated since 1997.
Home appreciation in Alaska has far surpassed the outdated federal capital gains exclusions, leaving many sellers unprepared for potential tax liabilities.
While Alaska lacks a state income tax, homeowners selling their properties may confront substantial federal capital gains taxes that can diminish their net profits.
Compared to states like California, Alaska's 22.5% of homeowners facing capital gains tax appears lower, yet impacts over 40,000 households.
Read at SFGATE
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