It just might be the perfect closing gift.

Julian Block, a nationally recognized attorney, syndicated columnist and former IRS special agent (criminal investigator) has written an accomplished guide for sellers on how to lower their taxes.

The Home Seller's Guide To Tax Savings: Simple Ways For Any Seller To Lower Taxes To The Legal Minimum, written and self-published by Block in conjunction with the Westchester Board of Realtors, is a new edition that incorporates law changes introduced by the 2006 tax act that took effect this past May.

His book discusses significant changes in how taxes are figured on profits realized from sales of personal residences. "The old rules generally allowed sellers to defer capital-gains taxes on their profits. Previously, there was no ceiling on the amount of gains eligible for deferral," explains Block. "To qualify for the deferral, sellers had to purchase a replacement residence that cost as least as much as the amount received for the one sold. Those rules were scrapped and replaced in 1997. The current rules trim taxes for most sellers of single-family homes, condominiums or cooperative apartments, but drastically raise them for many sellers in expensive housing areas."

But making and keeping more money from the sale of their homes doesn't mean sellers should leave money on the table.

Julian explains how to choose and implement tactics that shrink taxes to the lawful minimum for sellers with profits above specified amounts. "Sellers can 'exclude,' meaning they pay no taxes on 'profits of as much as $250,000 for single persons and married couples who file separate returns and $500,000 for married couples who file joint returns.' But sellers with profits that exceed the exclusion ceilings are liable for taxes. Sellers need not buy a costlier residence to qualify for the exclusion. However, the home sold must be owned and used as a principal residence for at least two years out of the five-year period that ends on the sale date."

The numbers that seemed so large in 1997 have become considerably less impressive in today's real estate market. Properties have appreciated so spectacularly in many places that profits significantly above the exclusion caps have become commonplace, particularly for individuals who have owned their dwellings for lengthy periods, says Block. Astronomical prices underscore that it is now more important than ever for sellers to avail themselves of often-overlooked, entirely legitimate strategies that enable them to decrease their federal and state tax tabs by many thousands of dollars.

Other topics include changed rules for long-term capital gains and the notoriously complex alternative minimum tax. The AMT now snags more and more far-from-wealthy folks who claim unquestionably legal deductions that they have come to take for granted. Block analyzes the effect of those changes on sellers and describes IRS-approved tactics that make it possible for them to sidestep or lessen the effect of the AMT, which disallows deductions for state income taxes and local real estate taxes, an important consideration for sellers in states like California, Massachusetts, New Jersey, and New York. Also, it shows how to escape hefty penalties for underpayments of estimated taxes.

Sellers who take home-office deductions need to know that convoluted rules kick in on the sale of a residence partly used as a home office for a business. Another complication is that the IRS retroactively liberalized the rules in December of 2002. Sellers who were unaware of the change and overpaid their taxes are entitled to recover overpayments, but only if they submit timely refund claims.

Widows and widowers may not know about a special break that slashes or even erases taxes on gain from the sale of an inherited home. The home's basis (original cost, plus improvements, in most cases) is 'stepped up' to its value on the date of death of the previous owner. Translation: IRS forgiveness of capital-gains taxes on the amount the home appreciates during the previous owner's life.

Then there are couples who plan to divorce or legally separate. Splitting spouses should become knowledgeable about surprisingly complicated rules for home sales and how to resolve their competing interests.

Casualty losses impact the tens of thousands of individuals whose homes or other properties are damaged or destroyed by natural disasters that strike every year, such as Hurricanes Katrina, Rita and Wilma that devastated communities along the Gulf Coast in 2005. Legislation enacted in 2005 authorizes increased deductions for casualty and theft losses attributable to those hurricanes.

No matter what a seller's circumstances, this book is bound to be a helpful guide. While reading about taxes can be nearly as unpleasant as paying them, it's better to take the preventative and curative approaches Block prescribes.

Editor's note: To order a copy, send $19.95 for a postpaid copy to J. Block, 3 Washington Sq., #1-G, Larchmont, NY 10538 or go his website, julianblocktaxexpert.com.

Published: July 10, 2006

Use of this article without permission is a violation of federal copyright laws.

Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment. Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's. Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. To contact Blanche, email her at . For more articles by Blanche, click here.