As I understand it, you must be approved for a mortgage and under contract on a home by that date. There has always been some confusion on whether you needed to close by that date though. As mortgage guidelines are changing daily, I would contact 3-4 mortgage bankers to discuss what they are offering. Not all lendors may be working this type of program. If you need a source to call, please e-mail me directly and Good Luck.
Sounds like a tax increase to me. Brad, I am glad you published this excerpt. I have heard very little of this through conventional media sources. Someone notify Clark Howard!
So, in short, for those of our clients who live in a home 3 to 4 years, they will absolutely have a tax liability upon the sale of their home.
bnix Mike: this will only affect Sellers who stop using a 'primary residence' and start using a new 'primary residence' prior to selling their old one. In other words, if you just live the house 100% of the time you own it, then the formula will result in you getting 100% exemption on the gains of the sale, regardless of the amount of gains. The change only affects the amount of the market who owns two properties at a time in which the former property was once a 'primary residence'. I for one am a good example.
I bought a house last year and declared it my primary residence (PR) in 2007. I tried to sell my former PR but was unhappy with the market and decided to lease it for a year (thru Dec 2008). Now if I wait to sell it in 2009, I will have to calculate the Cap Gains Exemption based on the formula above. Instead of just being exempt up to $250,000 in gain (which I would not come to in the old rule).
I bought a house last year and declared it my primary residence (PR) in 2007. I tried to sell my former PR but was unhappy with the market and decided to lease it for a year (thru Dec 2008). Now if I wait to sell it in 2009, I will have to calculate the Cap Gains Exemption based on the formula above. Instead of just being exempt up to $250,000 in gain (which I would not come to in the old rule).