The Housing and Economic Recovery Act of 2008 Amends Section 121

[Bill Exeter]

The Housing and Economic Recovery Act of 2008 includes a provision that modifies Section 121 of the Internal Revenue Code, which is often referred to as the 121 exclusion.

The 121 exclusion allows a homeowner to exclude up to $250,000 in capital gains from their income when they sell thier primary residence ($500,000 for a married couple).

There are strategies available to combine the 1031 exchange with the 121 exclusion. The Housing and Economic Recovery Act of 2008 modifies Section 121 so that it may affect the real estate investors ability to integrate the 1031 exchange with the 121 exclusion.

I have prepared a complete analysis of the issue that can be found here: http://www.exeter1031.com/article_changes_to_section_121.aspx and the entire content of the Act can be downloaded from here: http://www.exeter1031.com/irs_code_regulations_rulings.aspx for complete details.

As always, I would be happy to talk with you to help clarify any of the issues involved with this Act.