Beginning January 1st of 2009 the current 2 out of 5 tax rule will change.

Currently if you’ve lived in your Knoxville or Farragut, Tennessee home as your principal residence for any 2, doesn’t have to be consecutive years, just cumulative, of the previous 5 years you can exclude up to $500,000 of gain if married filing jointly and $250,000 if single.

The new rule is that if you used the property first as something other than a principal residence (such as a vacation home or investment), that you must pro-rate the gain so that some is taxable and some is tax free.

If you have a Knox County property that has experienced a gain in value, talk to your CPA before January 2009. There are actions you can take now to preserve the full tax free gain exclusion.

www.KnoxvilleHomeCenter.com is a great place to look for a new home and get valuable buying & selling tips.