Montana homeowners are facing unexpected capital gains taxes due to soaring property values. A report reveals that 53.6% have home equity exceeding IRS exclusions, with 18% surpassing the $500,000 limit for married couples. This situation arises because the capital gains tax exclusion has remained unchanged since 1997, despite a 260% increase in home prices nationwide. The tax policy in Montana, which taxes capital gains as income, adds another layer of financial burden. Homeowners, particularly retirees, are discouraged from selling, leading to reduced housing supply and rising prices in the market.
Over half of Montana homeowners possess home equity exceeding IRS capital gains tax exclusions. With home prices up, middle-class sellers face unexpected tax burdens.
The capital gains tax exclusion hasn't changed since 1997, while home prices have surged over 260%, pushing more homeowners into a tax bracket reserved for wealthy investors.
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