However, if those same $100,000 homebuyers lived for 37 years in an area that has seen enormous growth in home values — as is the case for many parts of California — and their home now sells for $2 million dollars, that’s nearly $1.9 million in profit, of which only $500,000 is excluded from taxes.
The taxable gain of $1.4 million at 20% would mean those homeowners are facing a $280,000 tax bill. In a state like California with additional tax, the overall payment would be over $450,000.
Oh woe is me, I only get to keep one million dollars of the money I made doing absolutely nothing except sitting on some capital. This is unfair and I am being oppressed.
Get fucked.
I'm sure they'll tell anyone who listened how hard they worked for it, too.
keeping an acceptable amount of profit from its sale
On no, I might not get enough money for doing nothing.
"waaaah capital gains tax waaaaaaaaaaahhhh"
Go outside and do some graffiti or fire some random shots in the air. Do your part to lower real estate prices instead of whining about the government getting in the way of your million bucks for the house you want to sell to a massive corporation so they can turn it into a vacant investment vehicle or Airbnb.
Turn part of the house into a granny flat and give the rest of the place to your kids. You can gift the house to your kid without taxes up to $13.61 million USD in value.
I expect these dipshits not to give a fuck, if the US had competent government they wouldn't tax the sale of a personal home and maybe find that money (if they even need to) somewhere else
Are they really gonna try to sell a capital gains tax cut on this bullshit?
Yes for now, but they will eventually have to sell said houses to pay for end of life care. And then who is going to be able to afford to buy them? Fucking banks.
“The exclusions are based on real estate values from many years ago,” said Poulsen. “None of it is indexed to inflation. A $250,000 per person exclusion? In a state like California that doesn’t quite do the job.”
Oh no I've made too much money this isn't fair
record scratch
Bet you wonder how I never thought this would catch up with me, don't ya?
Can't they do a 1039 exchange, stepping down about $500K each time?
Edit: no, you cannot go smaller. https://www.kiplinger.com/real-estate/1031-exchange-rules-you-need-to-know
