If you a buy a house for $150,000, live in it for more than two years, and sell it for $350,000 you pay NO TAX on this $200,000 realized gain. By contrast, if you invest $150,000 in a stock and sell the stock for $350,00 after more than one year, you must pay long term capital gains taxes of 15% on the $200,000 realized net long term capital gain. Why is this different treatment, which favors real estate over stock investments, built into the tax code?

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answer Fluctuations in the real estate prices are not much volatile as compared to the volatility ... View the full answer