9.8% of Homeowners in Iowa Will Face a Hidden Home Equity Tax If They Sell
Briefly

Many Iowa homeowners are unaware that selling their homes may incur unexpected capital gains taxes due to unadjusted federal exclusion caps. Nearly 10% of homeowners have gained equity exceeding $250,000, while 1% surpass the $500,000 limit for couples. The capital gains exclusion has not been updated since 1997 despite home values tripling. Iowa's state taxation further complicates issues, as capital gains are taxed as ordinary income up to 6%. This situation affects even modest homes in popular areas, potentially resulting in significant tax liabilities for sellers.
The capital gains tax exclusion of $250,000 for single sellers and $500,000 for couples was enacted in 1997 but has not been adjusted for inflation.
Almost 10% of Iowa homeowners are subject to a hidden home equity tax due to increased home values that have not kept pace with federal caps.
Read at SFGATE
[
|
]