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  • Resident Selling Home

    Hello All,

    My wife and I are listing our home on the market as we prepare for transition between residency and fellowship. Based on comps, we’re looking to net a profit anywhere between $150-300k (crazy Florida market). We’ve occupied the residence for about 3.5 years. Is there anything we should be looking for in regards to capital gains taxation and how to minimize that?

    We’re heading to the Midwest for my fellowship and a bit further North for my first attending gig in Aug 2023. I’d like to have money left for 20% down on a home in 2023 (after paying off credit cards) and I’m on track for PSLF so I don’t plan on paying extra towards student loans.

    What is the recommendation on what to do with that money while it sits? I don’t want the extremely
    low returns from traditional savings account but I don’t want to take on unnecessary risk as with brokered stocks. Any advice/help/suggestions would be great! Thank you all!

  • #2
    If you are married then you and your wife combined have a $500k capital gain exclusion on the sale of your principal residence. No tax due. There are some rules, but it sounds like you meet them: live there two of five years; neither of you used the exclusion in the last two years prior, etc. Here is a summary for you. https://www.nolo.com/legal-encyclope...exclusion.html

    As for where to stash the money, the key is somewhere safe and liquid since you plan to use it soon. I’d go money market fund, others would suggest high yield checking. There is actually nothing wrong with a savings account for a short period of time.

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    • #3
      this is an either/or situation. You either go for low returns OR you take on more risk for hopefully higher returns. In your short time frame, I'd stick it into a high yield savings account. You each could buy $15k worth of I-bonds if you want too....you can't get that money out for a year but you can after that and you just pay an interest penalty

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      • #4
        Too short of a time frame. Don’t chase returns and risk your capital.

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