Inbox Questions | Capital Gains on the Sale of Home
Big Picture Retirement®
Devin Carroll
4.7 • 546 Ratings
🗓️ 12 December 2024
⏱️ 7 minutes
🧾️ Download transcript
Summary
Today, we tackle a question from Patrick about the nuances of capital gains taxes on the sale of a primary residence. We break down how community property laws can impact your tax liability, the role of improvements in calculating your cost basis, and other key considerations to keep in mind when selling your home.
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Transcript
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| 0:00.0 | Welcome to the Big Picture Retirement Show. |
| 0:07.7 | Today, we're going to the inbox to answer questions sent in by you, our listeners. |
| 0:12.6 | Now, if you'd like to send us a question, just head over to big pictureretirement.com and click |
| 0:17.3 | the Ask a Question tab in the top menu. |
| 0:19.8 | Oh, and just a quick reminder. |
| 0:21.2 | On this podcast, we provide general information |
| 0:24.3 | and not specific tax, legal, or financial advice. |
| 0:28.0 | But if you're ever ready to move from the broad education we provide here |
| 0:31.9 | to personalized advice that's specific to you, |
| 0:35.6 | you can find links to our websites down in the description. |
| 0:39.2 | Now let's jump in to today's question. |
| 0:45.9 | Okay, John, today's question comes from Patrick. That's kind of long, but it's a good question. |
| 0:51.7 | Here's what he says. I'm 66 and considering relocating to |
| 0:55.1 | another state. I fully own my house with no mortgage. Congratulations, Patrick. And he purchased it |
| 1:01.0 | when married in 1992 as a joint owner with my wife, he says. Original purchase was $250,000 and |
| 1:07.5 | present market value is $900,000. Sounds like a pretty good investment, huh? |
| 1:12.4 | Absolutely. My wife passed away in 2012. At that time, I did not establish a new basis of the |
| 1:18.7 | property, which at that time had a value of $550,000. I believe there was no requirement at that time |
| 1:24.8 | to establish the new basis. At least I didn't think so. So if I sell |
| 1:28.6 | the property now under the most recent capital gains tax process, can I still claim my wife's |
| 1:34.7 | $250,000 tax-free gain plus mine, or did I miss the boat and can only claim my own $250,000 and pay tax on the entire gain. As of now, my asset |
| 1:47.8 | value is $350,000 once improvements are added to the original purchase price of $250,000. |
... |
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