Why Your Clients May Need to Sell Their Home

Since home sale prices have increased over $100k in the past year and prices are up about $400k in the last 10 years I had this thought. Should you sell your home now for tax purposes and savings?

On your primary residence if you lived in your home for the last 2 years, your capital gains tax exemption is $250k if single or $500k if married filing jointly. For example, my wife and I have lived in our home for nearly 8 years and our home has increased by about $350k in value. In another year or 2 we may hit the $500k tax exemption on any capital gains taxes. Thus, we will need to sell our home possibly in the next couple of years to avoid paying capital gains taxes.

Currently capital gains taxes are often 20% plus state taxes of 4.63%; but there is talk of raising the federal income tax rate on capital gains and thus our tax bill could be even higher on any gains.

Why do I tell you this? I bet you have clients and people in your SOI who may be hitting this tax exemption of $250k or $500k now or very soon. Thus, it may be time for them to sell their home and buy a new home. And you just got 2 transactions and look like a HERO to your clients.