Mississippi homeowners are facing a hidden home equity tax, affecting nearly 8% of them due to federal capital gains tax laws that have not adjusted for inflation. The exclusion limits set in 1997 have left many homeowners vulnerable as property values have significantly risen over the past 25 years. In Mississippi, capital gains taxes are levied as ordinary income, compounding the tax burden. Homeowners who exceed the $250,000 limit face average taxable gains of $72,661, which may lead to tax bills that threaten their financial stability and retirement plans.
In Mississippi, a hidden home equity tax is emerging, affecting nearly 8% of homeowners due to outdated capital gains tax thresholds that fail to account for inflation.
The capital gains tax exclusion limits set in 1997 have not been indexed to inflation, leaving many homeowners vulnerable as property values have significantly increased.
As home prices have tripled over the past 25 years, homeowners in Mississippi are now facing the unexpected burden of capital gains taxes on home sales.
With Mississippi taxing capital gains as ordinary income at rates up to 5%, many longtime homeowners are seeing their equity diminished substantially due to tax liabilities.
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