Tel. 213.365.1700 | Tax Calendar

Senior Citizen’s Replacement Dwelling Benefit (Proposition 60 and 90)

Senior citizens often sell their houses to move into new house. If you’ve lived in your house for a long time, you might qualify for this substantial tax savings. These constitutional initiatives allow senior citizens to transfer the trended base value from their current property to a new property if certain requirements are met. (Section 69.5 of California Revenue & Taxation Code)

If you meet the following requirements, you should fill out a Form BOE-60-A and file it to appropriate county.

Eligibility Requirements are as follows:

  1. Either you or your spouse must be at least 55 years of age when the original property was sold.
  2. The new property must be purchased or built within two years (before or after) of the sale of the original property.
  3. If a new property was purchased or newly constructed before the sale of the property, current marker value of a new property should be 100% or less of the market value of the original property.
    If a new property was purchased or newly constructed within the first year after the sale of the original property, current marker value of a new property should be 105% or less of the market value of the original property.
    If a new property was purchased or newly constructed within the second year after the sale of the original property, current marker value of a new property should be 110% or less of the market value of the original property.
  4. This is a one-time only benefit. Once you have not filed and received this tax relief, you nor your spouse who resides with you can ever file again. However, if you became disabled after you have received this benefit, you can claim for second property.

Reassessment Exclusion for Real Property transfers (Proposition 58 & 193)

These constitutional initiatives provide tax relief for real property transfers between parents and children and from grandparents to grandchildren. This makes it easier to keep property “in Family.” Transfers of ownership from parents to children, stepchild, son-in-law, or daughter-in-law by sale, gift, or inheritance qualify for the exclusion. You could keep your property tax as before the property was transferred to you.

This excludes between sisters and brothers. If grandparents want to inherit or give gift to grandchildren this only qualifies when parents are passed away. The property should not have to be for residing purpose.

Taxation on Sale of Home

From the gain on sale of primary residence (lived over two years in last five years), a single can exclude up to $250,000 and married couple can exclude up to    $500,000.

However, if you have not lived in the property for at least 2 years, or you have moved to a different place you may become qualified if you meet any of the following requirements:

  1. A change in place of employment: the new place of employment is at least 50 miles farther
  2. Health problem: To obtain, provide, or facilitate the diagnosis, cure, mitigation, or treatment of disease, illness, or injury of a qualified individual(including taxpayer and family)
  3. Unforeseen circumstances: expropriation, disaster, death, unemployment, divorce, giving birth of twins

If you had gain over $500,000 from the sale of your home, expenses you spent to improve and extend the useful life your residence may help you to reduce your tax.    When you do make such expenditures, it is always a good idea to keep adequate records and receipts for future usage.

For more information please visit the following link:

http://www.irs.gov/pub/irs-pdf/p523.pdf