I’m still often asked how does the Over-55 Rule works.

ANSWER:

THIS IS OLD LAW. IT NO LONGER APPLIES No rollover, no more over-55 rule.

The rollover or once-in-a-lifetime options were replaced with the current per-sale exclusion amounts under the Taxpayer Relief Act of 1997.

Before May 7, 1997, the only way you could avoid paying taxes on your home-sale profit was to use the money to buy another, more-expensive house within two years. Sellers age 55 or older had one other option. They could take a once-in-a-lifetime tax exemption of up to $125,000 in profits. And in all instances, there was tax paperwork (to fill out to show that you followed the rules.

Now when you sell your primary residence, you can make up to $250,000 in profit if you're a single owner, $500,000 if you're married, and not owe any capital gain taxes every time you sell a home. And there is no more age requirement.