121 Exclusion:

The 121 Exclusion allows you and your spouse to deduct $250,000 each from the taxable gains in your primary residence.  That means if your married and bought your home 20 years ago for $500,000 and you sell it now for $1,000,000, you owe no capital gains taxes.

Rental Conversion:

You could also rent out your primary residence. If the property generates rental income on two consecutive tax returns, you can then sell using a 1031 Exchange.

Downsizing Strategy:

What if your goal is to sell your current primary residence in New York and move closer to grad kids in Florida?

Here is a scenario. Bob and Linda own a primary residence in New York they bought 30 years ago for $500,000. It is now worth $2 million. They still have a $100,000 mortgage. They want to downsize and move closer to their grand kids in Florida.

Bob and Linda can sell their home, use the 121 exclusion and pay capital gains taxes on $1,000,000 of about $450,000 (Ouch!), then find a place to live while they try to find a home in Florida, or

They can get a special type of short term loan, take their equity of $500,000, pay off their $100,000 loan, and put $400,000 down on a new home in Florida. Now Bob and Linda can move into their new home while they stage and sell their old home.

Once sold, the short term loan is paid off and the remaining ~ $1,500,000 is placed into a trust. All taxes are deferred. Bob and Linda now have an income stream @ 6% or $90,000 per year from the trust and can defer the tax bill as long as they like. Since the trust is inheritable, they can pass this income stream on to their kids and grand kids or cash out at any time and pay the taxes.

Summary:

These are just a few of the many options you now have because you’ve met us.

We are skilled tax strategists and financial problem solvers with 17 tax minimization options we can combine literally 100s of ways to customize a tax strategy that meets your unique needs.

We are educators and consultants, not salesmen trying to earn a commission.

In fact, the first thing we do is try to find solutions so that you don’t need us at all. That’s why we provide you with our Tax Reduction Questionnaire or TRQ.

Just take the TRQ to your trusted tax professional to discover all the legal ways you can reduce your capital gains taxes. If the taxes due at the bottom of the form are more than you are willing to pay, then we will customize a strategy that meets your needs.

Just click the button on the right to schedule a complimentary 25 minute consultation to get started.