[Boomer]

C'mon, most of us are old enough to have owned houses over decades so we should remember that sweet, sweet tax law change in 1997 when the capital gains exclusion on a primary residence became $250,000 single/half a million for a couple.

Before that, the exclusion was a once-in-a-lifetime $125,000 after age 55; therefore, sellers tended to reinvest any profit in more expensive homes to avoid what could have caused a sizeable taxable event. (I always thought this was a big part of why all those new subdivisions full of McMansions started springing up. Those pretty, brand new McMansions were a big market, especially for those job-transferring from more expensive cities. Those transferred often were thrilled to see what they could buy in their new city. Why not? The alternative would have been to pay a honkin' cap gains tax on what was not invested in their next house.)

When the tax law changed in 1997 to allow the much bigger profit exclusion from taxes, it also was no longer once-in-a-lifetime. The requirement then became that the home had to be the primary residence for two years. (In fact, I think it might be 2 out of 5 years but 2 gets the exclusion. Flippers, who live in their houses, love it, too.)

That 1997 tax law change allowed a lot of aging boomers to downsize and keep some tax-free profits.

That 1997 tax-law change benefited a lot of homeowners, regular people, by letting them keep the change from a tidy profit on a home that had appreciated while buying their next home for less than what they had sold. That law no doubt has helped the growth of The Villages, too.

And that is my dissertation for this morning. I just wanted to remind my fellow boomers (and beyond) that throughout our decades of buying and selling homes, there has been more to a home as an investment than simply an increase in value.