You’re completely correct. In this particular case. BUT, let’s say I want to sell my (cheaper) house and buy another one — the same type of home, but I want to move. Well, I can’t, because as soon as I sell it and get taxed, I can’t afford to buy a house anymore. Kind of dumb.
Comment on This boomer couple would be hit with $700,000 tax bill if they sold their mansion
lowleekun@ani.social 1 day ago
Ohh no they have to pay taxes? Was this written by a toddler?
I swear to go, people are so disgustingly greedy i have little hope without a thorough revolution.
yeahiknow3@lemmings.world 1 day ago
CallMeAnAI@lemmy.world 1 day ago
That’s not how this works. Not how any of this works at all. God damnit people need to keep their traps locked shut.
If you keep a profit from the sale, you get a tax on the profit at the end of the year.
jj4211@lemmy.world 21 hours ago
Even if you use the proceeds to immediately buy another house, you still have to pay the tax, unless you are a landlord then you get a tax break, because we must protect those landlords but not private homeowners…
So you may be at a 15% or so disadvantage looking for a new place to live if you wanted to sell your property and move.
CallMeAnAI@lemmy.world 19 hours ago
Booo fucking hoo. If you’re sitting on 500k+ in gains after downsizing then eat it and pay the tax. I’ll play a sad violin story for the top 2% in the richest nation in the world.
yeahiknow3@lemmings.world 16 hours ago
The “profit” is realized as soon as the sale goes through. Your financial illiteracy and the confidence with which you wield is astonishing to me.
Bronzebeard@lemmy.zip 19 hours ago
The first 250k (500k for a couple) of profit from your primary residence (if lived in at least 2 years) is excluded from taxation.
Wrufieotnak@feddit.org 22 hours ago
To explain in a nicer way where your error in thinking is:
You don’t pay the taxes specified in the article on the whole amount of money you get for selling your house, only on the increased value compared to when you bought it.
So as example: you but the house for 1 million and sell it later for 2 million. Then the tax on the article is only applied to the 1 million difference, so you only give away part of the money that you got in addition to the value you bought the house for. So you always end up with more money than you paid for the house, just not the full value.
jj4211@lemmy.world 21 hours ago
Right but the rest of the housing market has also moved on. The cost basis of that house won’t come anywhere near buying equivalent housing in the present
Let’s say you bought a decent house back in the day for 100k, and now that house can go for 500k because it’s a typical family home and all those homes are now 500k.
Let’s say your spouse dies and you could stand for a different house, maybe closer to a family member that can help take care of things. You can sell your house for 500k, but you are left with only 420k that you keep. Sure you could easily afford 100k homes if they still existed, but now homes cost as much as you sold yours for.
The real kicker is there is a like-kind exemption that would negate this, but it’s not allowed for your actual primary residence, only as an investment property. Landlords are protected from this but residential homeowners are not.
yeahiknow3@lemmings.world 16 hours ago
I don’t have an error. If you buy a house for $200k (average price for houses in the US some years ago) and it now costs $500k (average price for houses in US today), this tax makes it LITERALLY impossible for you to sell your house and buy another one.
Wrufieotnak@feddit.org 16 hours ago
That part is normal?
For real estate there is always a loss involved. Because multiple people and their work are involved and the state also wants their taxes of course. What you want seems to be ‘government not involved’ market of real estate and I’m not really a fan of unregulated markets. They tend to fuck us normal persons even more.
The discussion for this article is about downsizing the house and that is definitely possible, even after paying that tax.
webhead@lemmy.world 3 hours ago
Business Insider so basically yes. I’ve never seen a “news outlet” blow business people as hard as them so I guess the name fits.
lowleekun@ani.social 2 hours ago
Problem is, many people do not see the lunacy and think taxes are stealing while it is at the moment the only way to take at least a share from the wealthy and give it to the poor.
But people hate the poor and needs. “Those lazy fucks deserve what they got” seems to be the spirit of the people i have talked to.