Uncle Sam encourages you to sell your home

Federal tax policy provides incentives for homeowners selling their primary residence, an accounting professor told me recently.

"When you sell, if you have a gain we're not going to punish you as much as if you had a business gain like selling stock in tesla," said Stanley Veliotis, an associate professor and the area chair of accounting and taxation at Fordham University's Gabelli School of Business. "If you sold your house at a gain, we feel bad to tax you on the gain."

That's why financial advisors and tax professionals have likely grown familiar with the Section 121 exclusion and the rules for the step-up basis in inherited assets, he said. The two means of avoiding capital gains and accompanying taxes on them interact in important ways for advisors and clients seeking to maximize their savings.

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