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If you purchase & keep a house more than two
years, you don't have to pay capital gains tax on it.
[/ QUOTE ] The point you are omitting though is that it has to be the home you live in 100% of the time .Not rental, second home,investment property,or vacation home etc etc...You guys really need to look into buying cars,collectibles,investment property,rental property,vacation homes with your retirement accounts,its a little involved but it sure beats having your retirement in a cd at 1.7%,or invested in failing banks and the like and there are no penalties for switching over,the restrictions are a bit overwelming but worth it in alot of cases.
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I also would not take that statement to the bank, as I believe only the first $250k ($500k MFJ) is tax free, they may have changed this recently though. Keep in mind that the AMT (alternative minimum tax) rules are kicking in for a lot of folks now, so certain tax breaks begin eroding rather quickly with the AMT.
Kendall, I believe the cap gain would put you into a the lowest tax bracket - which I think is 10% now.
Now I know why I don't do tax work - this stuff will drive you nutz! I'll stick to publicly held corp. SEC type work.
