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whom have owned properties for decades, are encountering unexpected capital gains taxes when selling their homes due to outdated profit exclusion limits.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Home appreciation in Alaska has far surpassed the outdated federal capital gains exclusions, leaving many sellers unprepared for potential tax liabilities.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.
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