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.
Comment on This boomer couple would be hit with $700,000 tax bill if they sold their mansion
CallMeAnAI@lemmy.world 3 weeks agoThat’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.
yeahiknow3@lemmings.world 2 weeks ago
jj4211@lemmy.world 3 weeks 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 3 weeks 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.
jj4211@lemmy.world 2 weeks ago
As a private homeowner you want to trade your $500k house to move near an adult child after your spouse dies. With the housing markets being equal, you end up owing a ton of capital gains tax but having to spend more just to try to keep even.
Or, as the tax code seems to want to encourage, the private homeowner becomes a landlord because that at least might let them keep pace with a new mortgage they have to take on.
It’s crazy that we give tax advantage to landlords and deny them to people actually using their houses.