About Jay Rotenberg Expertise Mortgages. I can answer questions about points, refinancing, kinds of mortgages, closing costs, credit issues, escrow issues, documentation needed, and more! I am the President and founder of State Mortgage Funding, Inc. of Boca Raton, Florida. I am licensed by the state of Florida as a licensed mortgage broker. I have been in the real estate and mortgage field for over 9 years.
Question We have a dairy farm in Florida and it is 325 acres. A developer has made an offer and we have decided to sell all but the 25 acres that our house is on. The house is our homestead and we plan to keep that as our only residence. According to Florida tax law, my husband can claim 120 acres as homestead, and I can claim 120 acres as homestead.
Are homesteads that are sold sheilded from capital gains tax? And if so for how long?
Answer The only thing that is sheilded from capital gains taxes are principal residences. This has nothing to do with Florida's homestead laws. Capital Gains in the amount of $500,000 are tax exempt for a married couple. Your acreage is probably worth a lot more than that.
You are keeping (not selling) your principal residence and selling off many acres. If you have owned this land for more than 12 months you will be subject to 15% capital gains taxes.
Florida's homestead is only there to protect you from creditors taking your property. It has nothing to do with Federal Taxes.
Sincerely,
Jay Rotenberg, President
State Mortgage Funding, Inc.
