Current tax law

Regarding “Tax benefits” letter (Page A14, Thursday), quite a few years ago the rules regarding capital gains for home sales were changed from requiring gains be rolled over into new property to avoid a tax to allowing for a tax exempt gain of $250,000 for a single person and $500,000 for married couples filing jointly if the homeowner lives in the home for a certain period of time.

Very few average Americans deal with this. In most cases, the sale of a home is not shown on the tax return at all. Everyone can adjust the original purchase price with additional expenses to increase the basis of the property in an effort to reduce the gain should it exceed the $250,000 or 500,000 limits.

The cost-of-living adjustment would be useful, for example, in sales of stocks but I’m not sure most average Americans are the ones investing in the market. Now, if COLA could apply to IRAs and 401Ks, that would be interesting!

What’s much more significant in the new tax plan is the removal of personal exemptions. People seem to be enthralled with the increase in standard deductions but fail to see that most of this benefit will be wiped out by not calculating personal exemptions. Wealthy folks are hit the least since high wage earners’ personal exemptions had been phased out based on income.

We all need to be better educated about taxes before believing that the powers-that-be have the average person in mind. Marsha Kaplan, Houston