Help me understand what this means?

[Mike Jones]

So this recent news sent to my email from BP with a link to:
http://www.biggerpockets.com/renewsblog/2013/01/01/fiscal-cliff-real-estate/

Says:
Additionally, the passed bill included an extension to keep tax-free the sale of a primary residence for American homeowners who profit $250,000 or less ($500,000 for married couples) from the sale of their home. This extension is also only available for those earning under $450,000 per year in income.

Does this mean a house I bought as my primary which I am preparing to sell and expecting to make less than $250k profit wont be subjected to taxes at all??

Or wouldn't I need to do a 1031 on this? What's the catch?

Thanks!

--Mike

[J Scott]

Originally posted by Al Brouillard:

It's a standard one time exclusion for a primary residence sold when you are over 55 years old. This is NOT for second residence or investment property. These types of properties must be done with a 1031 exchange to "defer" the taxes. You will not escape the taxes EXCEPT on the one time, over 55, primary res!

Lots of bad information in this post.

- The exclusion is NOT one-time. You can take it over and over on primary residences, as long as you've lived in them at least 2 of the previous 5 years;

- There is no age restriction;

- You do not need to do a 1031 exchange to get the tax advantage.