Mark Neumann: “74 percent of all senior citizens in Wisconsin still own their own home, and there is a new tax provision that is very…”

“74 percent of all senior citizens in Wisconsin still own their own home, and there is a new tax provision that is very directly aimed at senior citizens, but it is going to affect all of society, and that is if they have lived in their home for 2 years and they sell the home, they no longer pay any Federal taxes on it in the vast majority of the cases. Now, what has happened in the past is we had this rule that said if a person was 55, they could have a one-time exclusion when they sell their home. So what has happened is a lot of our senior citizens have sold their home at age 55, took the one-time exclusion, and then they went out and bought a smaller home, because of course at 55 their kids were gone so they did not need the big house any more. So they bought a new home at age 56, and they are now 67 or 68 and would like to sell their home again. Under the old Tax Code, since they had taken their one-time exclusion at age 55, they would pay capital gains on the appreciation of that home from the age of 56 to 66. Under the new Tax Code, there is no Federal taxes due on the sale of a personal residence as long as they have lived in the residence for 2 years in the vast majority of the cases. This is a phenomenally large change.”