How to Exclude Gain on Sale of Residence

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The tax payer relief act in 19 97 created i r c section one 21, which allows a home owner to exclude up to 250 thousand of gain on the sale of a primary residence. The real question is, at what point can he start excluding it? Does depreciation that he wrote off, does it get added back in? Our answer comes from our friend michael kits who is a brilliant financial planning mind. He says, because the exclusion is available as often as once every two years, some home owners may even try to sell and move more frequently.

#354: Charlie in Cali has enough money saved to pay cash for a house, but she and her husband decided to finance their home, instead. They’d rather invest the money and arbitrage the spread. But one problem: how can they keep themselves from touching this investment?

Jay is choosing between Fidelity and M1 Finance, and has questions about tax loss harvesting.

Nicole and her siblings will be inheriting some properties that they eventually plan to sell. How should they set up or organize these properties among so many owners? Should one person take the lead? Do they need a shared business account? Also, how should they evaluate a property and make sure they get a good deal when they sell?

Ed owns three homes, two of which he plans to sell in the next few years. He plans to live in them long enough to establish residence and take the capital gains exemption when they sell. Is his plan for handling the taxes solid?

We answer these four questions in today’s episode. Enjoy!

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