Hello fellow FI seekers.
I have a question for those who have sold your primary residence for a profit. We are in a position to FIRE inside of 3 years when my wife will have served for 20 years at her hospital. The plan remains to move to a much LCOL area and to sell this house. In meeting with a Realtor early this week for a consult, we were informed that our home is worth about 2.5 what we originally paid for it 17 years ago. We realize real estate prices are super inflated in our region due to the pandemic and want to sell now and rent for the remaining 3 years to take advantage of the crazy housing market we find ourselves in yet again. Immediately my mind goes to Cap Gains. I read about Rule 121 of the IRS tax code. Originally paid $220, agent suggests we list at $529 but he feels that it will generate a bidding war since our property is 5 minute walk to train and 2 minutes to bus.
Question is, who here has gone through something similar ? Will the gains be deemed income, or is it REALLY tax free at 500k if MFJ? I’m not a fan of IRS audits or inquiries of any sort.
Thanks in advance.
I have a question for those who have sold your primary residence for a profit. We are in a position to FIRE inside of 3 years when my wife will have served for 20 years at her hospital. The plan remains to move to a much LCOL area and to sell this house. In meeting with a Realtor early this week for a consult, we were informed that our home is worth about 2.5 what we originally paid for it 17 years ago. We realize real estate prices are super inflated in our region due to the pandemic and want to sell now and rent for the remaining 3 years to take advantage of the crazy housing market we find ourselves in yet again. Immediately my mind goes to Cap Gains. I read about Rule 121 of the IRS tax code. Originally paid $220, agent suggests we list at $529 but he feels that it will generate a bidding war since our property is 5 minute walk to train and 2 minutes to bus.
Question is, who here has gone through something similar ? Will the gains be deemed income, or is it REALLY tax free at 500k if MFJ? I’m not a fan of IRS audits or inquiries of any sort.
Thanks in advance.