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Boomers wanting to downsize face huge tax bills
(www.cnn.com)
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this post was submitted on 30 Jan 2024
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You can actually deduct the cost of any improvements you've made to the home. You can't do much about inflation costs, but are you really arguing that it's bad to only receive 85% of free money rather than 0% by not selling?
Except you aren't just selling. You also have to buy. And if from the tax and high housing prices it's a wash to downsize, there's not nearly the incentive to.
High housing prices also mean a high selling price for you too and taxes being percentage based means there's never a scenario where you wind up with less money than you would from selling a smaller, cheaper house because regardless of where you are, bigger houses sell for a lot more than smaller houses. The only scenario where this makes sense is if you sold a large home in a place like rural Oklahoma and moved to a shoebox in San Francisco, but that's not what's being described in the article.
You've missed the point. People are breaking even downsizing. That'll mean they won't. It goes over this in detail in the article.
If I've missed the point then why can't you explain how big houses are selling for nearly the same as small houses to the point where people are breaking even going from 3000sqft 5 bedroom homes to a 1200sqft 2 bedroom? A 15-20% loss from capital gains over 500k isn't going to do that nor is an additional 15% tax from California.
The only possible scenario where that makes sense is if you're comparing a $500k home from a married couple to another couple with a home valued at 30% over $500k. For those people, they're going to receive the same as the couple who had $500k in capital gains. This is a math problem so you can't just waive it away with "my opinion is different and you missed my point."
The example in the article is absurd as a single family home with property isn't going to sell for slightly more than a condo unit in some giant complex. That's why they had to rely on an example with made up numbers. If you look up a home their size in El Cerrito, just outside San Francisco, you're looking at $1.6M while a condo is going for $400k. Surely they could afford a $400k condo with $1.37M in profit.
So now you're doubting the article because you've got nothing else. Cherry picking numbers so you don't have to face the arguments presented.
You haven't presented any argument other than saying "you're wrong," and yes I absolutely disagree with the article based on real, verifiable facts. Cherry picking numbers? The numbers in the article are fictional. You can go check out Trulia or Zillow and see the selling price for a home that size and the purchase price of a condo in the same area.