Another question: does the new rate apply to the whole gain (exclusive of the $250,000 exemption), or only on the portion that accrues after the new rules come into effect?
For example, buy property in 2004 for $100,000, property is worth $200,000 now, sell in 2034 for $250,000.
New rules on $150,000 of gain, or old rules on $100,000 and new rules on $50,000?
(of course, the whole concept of the value of a property that is not sold is inherently problematic, but the tax code already provides for such values to be used e.g. when a property changes use)
(although the explanatory notes don’t explain. For example, when explaining how to calculate taxes on a rental property, at a certain point it blithely says to write the value of the land in one place and value of the building in another, as if each property has a big pricetag on it that breaks down its value into land and building components)
This relates to a valid concern about changes of this nature: if someone has planned based on the rules that have been in effect, new rules may have a significant negative effect on them, and characterizing everybody affected as wealthy and therefore not worthy of concern does not change the fact that a middle class person can easily have a small number of significant assets by the time they retire.
For example, buy property in 2004 for $100,000, property is worth $200,000 now, sell in 2034 for $250,000.
New rules on $150,000 of gain, or old rules on $100,000 and new rules on $50,000?
(of course, the whole concept of the value of a property that is not sold is inherently problematic, but the tax code already provides for such values to be used e.g. when a property changes use)
(although the explanatory notes don’t explain. For example, when explaining how to calculate taxes on a rental property, at a certain point it blithely says to write the value of the land in one place and value of the building in another, as if each property has a big pricetag on it that breaks down its value into land and building components)
This relates to a valid concern about changes of this nature: if someone has planned based on the rules that have been in effect, new rules may have a significant negative effect on them, and characterizing everybody affected as wealthy and therefore not worthy of concern does not change the fact that a middle class person can easily have a small number of significant assets by the time they retire.