Capital Gains Taxes for Sale of Principal Residence in Kitsap County

The $125,000 once-in-a-lifetime capital gains tax exemption was changed by the omnibus tax change of 1997.

The exclusion for individual homeowners is now $250,000 and $500,000 for a married couple. Owners may take the exclusion once every two years but must have resided in that home for no less than two of the previous five years. Note: In some instances homeowners may be eligible for a partial exclusion, prorated by the number of days that the property was occupied by the homeowners. This link will take you to the IRS website which may help clarify your situation.

Generally, property values have doubled over the past five years in Kitsap County due to appreciation (Rule of 72s). And you may be approaching the capital gains limit if you have lived in your home for 15 years or more. The question becomes: "do you want to avoid paying capital gains taxes or not?"

I can certainly discuss alternatives with you and it would be wise to consult with your attorney or accountant before you make any decision.