• Call Krista - OiC Real Estate Services: Is It worth the GAIN?

    With the housing market being at such an all-time high, many people are calling to see if it makes sense for them to sell their homes even if they potentially have to pay capital gains. 

    The first part of this question is how to determine if there is in fact a potential “GAIN” that could be taxed. If the home is your primary home, then as a married couple, you have a $500,000 potential sheltering of profit. This means that if you purchased the home for $250,000 and it is considered your primary residence; you could sell for a NET sales price of $750,000 And that profit could remain in your pocket. This means after the costs to sell, keeping this money could offer multiple options. 

    Other people who have rental properties are choosing to sell their rentals since they are realizing a good profit and figure that even with paying the gain, it makes sense since instead of getting smaller amounts of money each month, having access to their large amount of cash equity gives them lots of freedom and ways to potentially reinvest.

    One question that does come up just to clarify is that the gain has nothing to do with amounts owed on a property. If you bought the property then refinance it to take money out for personal use, this has nothing to do with what would be considered a potential profit for taxable gain purposes, however, if you use money to improve the property, then it could potentially impact the way the capital gain would be figured. Just know that the amount of equity and the amount of Gain could be two completely different things!

    No matter what, if you would like direction or suggestions, please reach out! I love helping you understand your resources and options! Call or text today! 805-620-7355