no need to rollover $ into a new to avoid capital gains if lived in home 2 out of last 5 years

I thought you don't pay capital gains if you roll the money into a new home?

Anonymous wrote:OP, my understanding of the capital gains is that it's only profit that counts. So if you bought your house for $450k and it's now worth $950, then yes, you might be subject to it. But if you bought your house for $650 and have paid down $200k of mortgage, you're only at $300k in capital gains.

In other words, it's not about the amount of equity you have in the house but the current resale value as compared to the price you paid for it.

OP here. Thanks! As I said, it's a SMALL consideration, but one that has crossed our minds if we stay in the house and pay it completely off. Of course, we'll save receipts for work done, but it's unlikely we'll have enough work done to raise the cost basis enough that we won't owe something. Anyway, small potatoes I suppose compared to the rest of the factors in the decision process.

OP, my understanding of the capital gains is that it's only profit that counts. So if you bought your house for $450k and it's now worth $950, then yes, you might be subject to it. But if you bought your house for $650 and have paid down $200k of mortgage, you're only at $300k in capital gains.

In other words, it's not about the amount of equity you have in the house but the current resale value as compared to the price you paid for it.

Anonymous wrote:We decided to stay put mainly because the kids will be out of the house in about 8 years, and at that time, we would want to downsize. How old are your kids and what are your plans for when they move out?

No kids involved. We have talked about possibly 1 in the next year or two though.

Anonymous wrote:

Anonymous wrote:Up to 250k of profit from the sale of your primary home (500k if filing jointly) may be tax free... talk to a tax advisor before deciding if that a primary reason for deciding one way or the other.

OP here. I know and we file jointly. I was just pointing out that we're at 500k now so if we stay and pay it off we'll certainly owe taxes if we sell and move to a LCOL area in retirement. Like I said, it's a small consideration, but one we've thought about when pondering this decision. Thanks!

But you can subtract from that amount anything you put into it, like new floors, new kitchen, new roof, etc. So keep your receipts!

We decided to stay put mainly because the kids will be out of the house in about 8 years, and at that time, we would want to downsize. How old are your kids and what are your plans for when they move out?

Anonymous wrote:Up to 250k of profit from the sale of your primary home (500k if filing jointly) may be tax free... talk to a tax advisor before deciding if that a primary reason for deciding one way or the other.

OP here. I know and we file jointly. I was just pointing out that we're at 500k now so if we stay and pay it off we'll certainly owe taxes if we sell and move to a LCOL area in retirement. Like I said, it's a small consideration, but one we've thought about when pondering this decision. Thanks!

Up to 250k of profit from the sale of your primary home (500k if filing jointly) may be tax free... talk to a tax advisor before deciding if that a primary reason for deciding one way or the other.

Anonymous wrote:OP again. I left out mortgage details. Our existing home will be paid off in 12 years and our interest rate is 3.625.

Thanks again for all the help everybody!!

Yeah don't move!!!

OP again. I left out mortgage details. Our existing home will be paid off in 12 years and our interest rate is 3.625.

Thanks again for all the help everybody!!

Anonymous wrote:Moving is a real pain - I would personally not move. What are your reasons for wanting to move?

OP here. Strictly to get a nicer/larger house. There is no other justification for it. Example - one house we looked at has twice the yard, a pool, a nice screened in gazebo in the backyard, twice the sqft, etc.

Anonymous wrote:Weird thread, I know, but we've got about 500k in equity in a 950k house and have been kicking around whether or not we want to move or stay put and pay it off. I know we'll pay cap gains tax on it when we sell if we stay since we'll have >500k in equity so that's a factor, albeit not a huge one. Mortgage is 450k and our HHI is around 350-400k so the payment is very manageable. We've been looking in the 1-1.3 range and would probably put 500k down so would end up in a 500k to 800k mortgage if we decide to move. Option B is to stay put and pay this house off, but if we do that we will want to throw some significant money into it (exterior upgrades, new kitchen, redo at least 1-2 more bathrooms, etc.). Probably somewhere between 100-200k.

Any opinions on what you would do in our shoes?

I'd renovate. Why? You'll spend 100-200k on capital gains, real estate commissions, movers, window treatments etc. I would only move if I wanted a different location. Also I'm assuming you'd start over with your mortgage which is another disadvantage to moving. I'd stay put and enjoy not being house poor.

Moving is a real pain - I would personally not move. What are your reasons for wanting to move?

Weird thread, I know, but we've got about 500k in equity in a 950k house and have been kicking around whether or not we want to move or stay put and pay it off. I know we'll pay cap gains tax on it when we sell if we stay since we'll have >500k in equity so that's a factor, albeit not a huge one. Mortgage is 450k and our HHI is around 350-400k so the payment is very manageable. We've been looking in the 1-1.3 range and would probably put 500k down so would end up in a 500k to 800k mortgage if we decide to move. Option B is to stay put and pay this house off, but if we do that we will want to throw some significant money into it (exterior upgrades, new kitchen, redo at least 1-2 more bathrooms, etc.). Probably somewhere between 100-200k.

Any opinions on what you would do in our shoes?