Capital Gains, 1031 & Homeowner Tax Breaks

Homeowners can EXCLUDE gain on a principal residence — $250,000 single / $500,000 married filing jointly — if they owned and used it two of the last five years; the exclusion is reusable every two years. Investors defer gain through a 1031 LIKE-KIND EXCHANGE: investment or business real property swapped for other investment real property, using a qualified intermediary, identifying replacements within 45 days and closing within 180; receiving cash 'BOOT' triggers tax. Depreciation (27.5-year straight-line on residential rentals) shelters income but is recaptured at sale. Mortgage interest and property taxes remain itemized deductions within federal caps. Agents flag issues; CPAs give tax advice.