In CA, When a senior citizen downsizes homes, what r tax results?

Question

I heard somewhere that in the State of CA If a Senior Citizen "downsizes" their home, they can use a portion of the proceeds to purchase a new home, and then are taxed ONLY on capital gains after purchase (not including standard 250K tax free deduction). Does anyone know where I can research this issue?

Thanks!

Answer 1

Not sure of any state pecularities but there is no special federal treatment for senior citizens. They get the $250k or $500k exclusion if they have lived in it for 2 of the 5 years prior to the sale and used it as a principal residence. The old rollover rule was discarded about 10 years ago when the current exclusion was passed in to law.

Answer 2

Capital gains ...