European Stars And Stripes (Newspaper) - October 25, 1987, Darmstadt, Hesse Pago 20 the stars and stripes sunday. October 25,1987 investor s guide by Bill Doyle bid woman 51, divorced no i Homeowner. I an contemplating Selling my House re Purchas ing i mull condominium. I Don t know anything about capital gains do Voa Fame any suggestions for me one. Don t sell your Home until you reach age 55. By wait ing until then you can exclude up to. $125,000 of dolt your capital gain profit on the tale from tax. That will save a bundle of dollars. Anyone 55 or older who Sells the principal residence he or she has lived in for at least three of the previous five years a entitled to this once in a lifetime exclusion. Your capita gain will be the Dif Ference Between your basis and the proceeds of the Sale. Your basis is Hie Price you paid for the Home plus the Cost of All additions and improvements. After you turn 55, you can sell your Home and pay no capital gains tax on up to 5125,000 of the profit from the Sale. In your Case that tax saving should be Well Worth the three year wait. Q. In regards to the Sale of one s Home is there a difference Between the Onte left lifeline exclusion of capital gains tax and the deferral of that tax a. Yes indeed. As the term implies the once in a lifetime exclusion can be taken Only one time by a Homeowner 55 or older who has lived in i or her principal Resi Dence for three of the previous five years and is limited to $125,000. The deferral is used when you sell your principal residence and buy or build another residence within two years. The internal Revenue code requires you to use the deferral every time you sell and buy your principal residence within a two year period. If the next Home you buy is More expensive than the Home you sold you pay no tax on the profit from the Sale if the next Home costs less than the Sale Price of the Home you raid you pay capital gains tax on the lesser of either the profit from the Sale of your previous Home or the amount by which the adjusted sales Price of your previous Home is More than the Purchase Price of your new Home. When you defer the capital gains tax on a borne tale you Post Pone that tax liability until you finally sell and Don t buy another principal residence. At that Lime you add up All the capital gains from the Sale of the Home on which you deferred tax. Then you can take the once in a lifetime exclusion. If the profit from he Sale of your last Home and t e deferred capital gains on your previous Homes total 1125,000 or less you owe no tax from that final Home Sale. Q. My wife Bud i Ore in the pro Cess of dung our Horn and mating into a rented Bome. How do we claim die on in of ctr exc Bacoat a. By filing form 2119 with your Federal income Tan return. That form is used to obtain the once in a lifetime exclusion or to obtain a deferral of tax on profit from Sale of a Home. Anyone who Sells a principal residence is required to include form 2119 with the income lax return for the year in which the Sale takes place. Business news Wall Street tremor Shook world new York a the Stock mar Ket s mull trillion Dollar might jolted the world the past week with a crash so terrifying it left Wall Street in disarray and raised urgent questions about the future of the Economy. Despite what some economists called Blithe assurances from president Reagan and hit aides that there was Tittle or nothing to worry about suddenly a lot of people were worried about their jobs and financial Security. To older americans the crash of 1987 stirred dormant dark childhood Mem ories of the crash that preceded the great depression. To Youthful Harvard my As who had assumed the Market could Only Rise there was disbelief dismay and dread that future affluence could be wiped out with frightening dispatch. The Dow Jones Industrial average closed Friday at 1,950.76 Points for a record weekly loss of 295.98 Points or 13,17 percent eclipsing the previous re Cord weekly loss of 2,15748 Points or 9,49 percent set the week before. What follows is a Day by Day synopsis of the tumultuous week Stock pulse by Siw Ltd Avni Thiu Tantri c 197 nest cd new a elect of Niv Turat to inf Tope Euhl i bomb i a null in Mhz bar ten am to Ameis a actin b avg kit pm Cut e 150 it Tou 4k s.52 19.0 3.1 33 4tt fund prices from Page 19 cd to of shh Brut own Innus 0 am to 1f of in dts it to do 0 own of tug go act Nam m and Hun by it Tift Rrt for w Tiff 9?t in 9 m 1007hl 902nl 1419ni 14 i no 122inl 017nl 12iinv Ihunt 1249nc 3? t4.so n l 19d9nl 10.49 n l 10mmv 12 97 h l ii in. 14.97 h u 1j2bnl 71 73nl. 797nt. 9�hl 991 h. 9�n.i_ 10jonl. 10mnl. 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S million shares set the previous Friday when the Dow average plunged a then record of 108.35 paints. Nose chair Man John Phelan called it the nearest thing to a meltdown i Ever want to Many economists said fears about the Economy . Indebtedness and fraying International cooperation coalesced to produce a crisis. Reagan cautioned against panic saying there is nothing wrong with the tuesday stocks that comprise the Dow Jones Industrial average rebounded but the broader Market was battered again As alarm about the crash spread among Small investors. The Dow Jones average closed up a anti Camtu Lim Tarn via Voi or firm be m 9o5.7do 1ih 137 0,100 a 1127 7.0 w1.4w my 4m.300 13n 1h, 15391 Roo an 033300 k9.700 s 049 10.031s.100 9h 101 130 0.7 Slack Oiw Milb a Mimi Creca bin Hula Tom at Fri Tom Titi pts to am in 1 90v.900 1hlortnur til 273,900 an and can gum i Vii Cicman Gielau a m a us 7u Al kind too 3.ba on til 44 Ith so a in us 79 i Mil pm 198 t 1921 21,0 0.7 Fanon u 21% 3k a pm k i9k 3a St the k a is a to k z5� a comb i in i of Ito of co Holgui b 11 2 2.19 60 hihi19nlll record 102.27 Points at in volatile trading and nose volume hit a new re Cord of608.12 million share. Dozen of companies announced Stock tin backs id exploit what they considered bargain prices some impending Lalun Ven were scrapped and a handful of Small securities firms failed. In Washington Federal Reserve chairman Alan Greenspan at tempted to soothe the Market by indicating a switch to a looser Money policy Wrd Nesity stocks recovered on a much broader front recouping More than half the ground lost monday and prompting Rea gun to say the crisis appeared to be Over. But investment pole Minali remained worried about the underlying health of the Market and Ore search for came of the crash focused increasingly on the use of computer assisted trading of Stocki and Stock futures. The Dow Jones avenge loaned i s6.b4 Points to 2,027.8$, far exceeding the one Day record gain set tuesday. Thursday the Market retreated sharply again in volatile trading dousing optimism about a Quick recovery. Traders Laid the mar Ket remained extremely vulnerable to Rumor. The Dow Jones average kidded 77.42 Points to 1,950.43. In what some economists and political commentators called a significant rever Sal however Reagan indicated a new willingness to Compromise on a tax in crease and other items to reduce deficit pending. Market Leaden also moved to relict trading hours to ease an order backlog and limit the use of computerized trading to minimize volatility. Friday stocks fell again but the slide waned at exhausted traders welcomed positive news about Low inflation and Strong eco nomic growth. The Dow Jones average ended the Day up 0.33 Points to 1,930.77, though broader indexes were moderately lower. A Exchange shut Down two hours Early giving Wai Street a much needed respite. But there was Little consensus on what the future held. 19 Tut lab o Sra or tt7 i0.7 Eui 125 s3? urn 11.19 ii Euly inc to inc by my nov Mun nil u3 Oil and Chr Sam in Imiajo 9mi Aid of wifi 971 7� 7.44 919 9.� 10 9 of 9j9. Ii no 9 91 to e. 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