When thinking about selling, homeowners (especially the long-timers) complain about paying the capital-gains tax on their net profit above the $250,000 exemption per person. With the rapid escalation in values lately, it has turned into a six-figure tax for many!
Here’s something to think about and I’ll give credit to Doug because it’s been one of the main reasons he has wanted to move. The problem is that people don’t move enough.
Want to avoid paying capital-gains tax?
You should move every time your equity approaches the exemption amount!
The last big frenzy in the early-2000s was fueled by people taking advantage of their tax-free profits by moving repeatedly, and getting rich in the process.
It’s when I came up with my favorite motto:
Don’t Unpack, I’ll Be Back!
Of course, I think everyone should move every 6-12 months – it’s exciting!
You can rent out for three years and take the depreciation then sell preserving your exemption(s).
Yes, and a great idea in a rising market. If anything changes, you can always sell earlier.