My story: 8 months from finishing residency, likely doing a one year fellowship in another state. Will be matching in mid December. We bought a townhome for 260k 2.5 years ago, now worth 365-375k based on recent sales. I know what you're thinking - why did you buy as a resident - but it was in a hot market and rental prices were unaffordable in an area we wanted to live so we bit the bullet.
Now with tax reform looking to target the tax free capital gain sale of a primary residence, I'm wondering if we should cut our home loose to lock in the gain. The podcast mentioned the most recent tax reform proposal requires living in home 5 of last 8 years to be tax free. It seems to likely take effect January 1 if it passes. I was unclear if this was House or Senate bill (or both), and I realize it could change. But the way I see it, we have a few options:
A. Continue to live as we would otherwise and sell next June risking paying taxes on our capital gain
B. Quickly put our home on the market and try to sell before January 1, guaranteeing the tax free gain
C. Wait and see where I land for fellowship in mid December (95% chance out of state), then figure it out, which means likely listing Jan/Feb
The market is not quite as hot as it has been, but still hot enough to find a buyer within a few weeks. We may have to sell for less than our dream price but would still be able to lock in a sizable gain. If they institute this new 5/8 years to qualify for tax free gain, any chance they would grandfather in those of us who own prior to Jan 2018? If you have made it this far, thanks for your time.
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