PSP Investments is one of Canada's largest pension investment managers, with $139.2 billion of net...

December 28, 2017

Example 1: A, a single filer, earns $210,000 in wages and sells his principal residence that he has owned and resided in for the last 10 years for $420,000. A’s cost basis in the home is $200,000. A’s realized gain on the sale is $220,000. Under section 121, A may exclude up to $250,000 of gain on the sale. Because this gain is excluded for regular income tax purposes, it is also excluded for purposes of determining Net Investment Income. In this example, the Net Investment Income Tax does not apply to the gain from the sale of A’s home.
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Insurance products and services are offered through TD Wealth Management Services Inc., (“TDWMSI”), a licensed insurance agency and a subsidiary of TD Bank, N.A. TDWMSI represents the insurer in placing your insurance and may provide services to you for that insurer. TDWMSI will receive compensation from the insurer in connection with placement of your insurance.
Tax Disclaimer: The value of the reward you receive may constitute taxable income. Merrill Lynch may issue an Internal Revenue Service Form 1099 (or other appropriate form) to you that reflects the value of the reward. Please consult your tax advisor. Bank of America Corporation and its affiliates and associates do not provide tax advice. Hassett, Kevin A., and R. Glenn Hubbard. Taxes and Business Investment.” In Alan Auerbach and Martin Feldstein, eds., Handbook of Public Economics. Vol. 3. New York: Elsevier, 2002.