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Comment on This boomer couple would be hit with $700,000 tax bill if they sold their mansion

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.

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jj4211@lemmy.world ⁨3⁩ ⁨weeks⁩ 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.

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yeahiknow3@lemmings.world ⁨2⁩ ⁨weeks⁩ 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.

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- Wrufieotnak@feddit.org ⁨2⁩ ⁨weeks⁩ 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.
  
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  - yeahiknow3@lemmings.world ⁨2⁩ ⁨weeks⁩ ago
    You think it’s normal to lock the US population into place, decrease house market liquidity, reduce inventory, and drive up prices?
    
    Here’s what I think is normal: the primary home, traditionally the ONLY stock of wealth for the working and middle classes, should not be taxed. Period. Your second house should be taxed. Your third house should be taxed. Your stock holdings should be taxed. Your huge boat should be taxed. Not your home.
    
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