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Show i ! j ; Advertisement i SPEAKI"S GF HONEY A STRATEGY FOR I THE RETIRING i HOME OWNER By EZRA T. CLARK j President Davis County Bank I've written about strategies for lax- I payers. Now here's a possible plan for a home owner approaching retirement. ! If you've been living in that good, i substantial house of yours for many j years and the mortgage is paid off. you ; have great leverage with your equity. I . In many areas, I housing prices have i doubled in the last " m.'mmm mmi ! 10 years. This I , $ I means that if you M j bought a home 10 I I yea is ago for " ,3fc t0Kt ; ' ' ; $2.r.000, chances are r ' excellent that you I could sell it for , ' ; j $50,000 today. And X Jit I if you bought it 25 Si to 30 years ago. it t - -1 j ma.v woh 'n. EZRA T, CLARK ; today's market j three times what j you paid for it. i Okay, you say, you agree with all j this. "How does it apply to me and 1 how can I cash-in on this situation?" j Present federal income tax laws give I preferential treatment to anyone 65 or older who sells his home. ! In essence, the law states that if you i sell your principal residence at a net j selling price of $35,000 (that's after ' real estate commissions and other S escrow fees have been subtracted from f the gross sales price) there is no tax on ! the gain, regardless of low big that gain might be. j The law states further that if your j net selling price is more than $35,000, I the percentage of your total gain that 8 is freed from tax is the ratio between '5 000 and your net selling price. Let's take an example. The home you paid $25,000 for about 25 years ago can be sold today for $80,000. After realtor's commissions, attorney fees and other closing costs, you have a net of $70,000. You also have a tidy $45,000 profit. Since the ratio between $35,000 to $70,000 is one-half, one-half of that $45,000 profit Ls freed from tax. The remaining $22,500 is treated as a long-term long-term capital gain. This means only one-half of it is taxable, or $11,250. Assuming ybu are in a 30V tax bracket, this means you would pay a tax of $3,375 on a $45,000 profit. Since you had $70,000 in your pocket alter the sale, you still have $66,625 left after paying your income tax. Now consider the possibility of investing in-vesting that $66,625 into long-term certificates of deposit of T or better. You can arrange to receive your interest in-terest monthly. You would have at least $388 coming in every month. That should be sufficient to provide comfortable accommodations for you in a very good apartment. Your worries wor-ries about maintenance expenses and yard work would be ended. Best of all. you'd never have to touch vour nest-egg. nest-egg. There are no strings attached to such a deal. But there ar a few conditions con-ditions that must be met to take advantage ad-vantage of it. First, you must be at least 65 at the time of sale. (If the home sold is in the names of both the husband and the wife, only one of them need be 65.) Second, the home must have been your principal residence for at least five of the last eight years. Finally, this is a special privilege you can take advantage of only once in a lifetime. This is one of many things you can do with the equity you have created in your home. It's worth looking into. I O EASTER BUNNIES Main at Fourth North, FAIRYLAND VvVvVi ? Bountiful, Utah 84010 ZtZ "S. A WSM I 5 Phone 295-8491 soa a,. rrfV0sr 1 6 11 NowHllas. Elc. Chocolates W I SQifSk. Also Large As JmI sjMmJ w' Ma f so we can give you yTv V L-illF-lK Y? Tell my mommy ;l '"T''IftlliiTt 1 j .Jr to bring my Easter camti k " from the Cottage. ' , We Have. .. -i I .All candy Easier baskets Solk) chocoattpastel rabbiu. ;i f Clear candy tops .3 1 1 Candy peek-a-boo sugar molds. Sugar molds lmPrtl1 ian pape' 99 ducks and rabbit. Filled and unl.lled. 1 Quality cream filled eggs. We will write names on Hand-dipped quality chocolate 1 f them. Easter egg shaped bom. y-4newe?Mtf wTw4jiMeiwyyMwieeii4iii4itf I BC's Family Fabrics (Formerly Fashion Fabrics of Bountiful) EASTER SALE! Easter Favorite Full Bolts FLOCKED BRUSHED SHEERS 1 66 DEHS 044 45" Nylon on Polyester ij 45" Cotton W Reg. $2.29 to $2.98 U yd. Reg. to $3.49 Yd. K , Ponte Stitch New Shipment! PASTEL POLYESTER 5 Fir KNITS 944 THREAD not 58-60" wide jBr ' VJ Full Bolts ff 225 Yd. Spools - I Reg. $3.69 Yd. ISM 25 Colors ' Novelty Sayings By the Yard fiflC 'T'SHIRT BONDED 9 !1JS -398 BATTING- L .Reg. 5.49 Yd. 48" Wide Yd Polyester H 02. 1 JL 45" Wide " " 60" Wide FASHION DOUBLE KNIT PRINTS Me WHITES 1 Poly and Cotton l I . ,. I ..Reg, to $2,8 Yd. y, ( " r; Hours: Blfe DC S Mon.-Fri- (Family Fabrics Cloward Proprietors 5 Points Shopping Center Sat Bountiful 292-2202 10 a m (Fashion Fabrics Former Location) to 6 P v |