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Boomers wanting to downsize face huge tax bills
(www.cnn.com)
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this post was submitted on 30 Jan 2024
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On the other hand; would you personally make that choice if you were in their situation? I am willing to bet you, nor any other reader, would not. While that doesn't excuse the greed aspect of it; it does cast at least some light upon why they are refusing to sell and take a loss on it.
If you only paid $100,000 and you made $1,000,000; you'd have $900,000 profit; of which you'd probably only see ~60% to ~40% of, if Capital Gains taxes are anything near what I think they are. If we assume a "worst case", where the Federal Government takes 40% and the State takes about 20% more, that means your tidy profit is only about $390,000. That means you've probably got to secure another $140,000 in financing on average to pick up a more modest $500,000 home (in today's market) to retire in.
But villainizing the boomers isn't going to solve the housing crisis easier either. We legitimately need more homes. We. Need. Them. Yesterday. So maybe the policy needs to lean towards bigger developments that cost less. We did it during WW2; where massive amounts of homes were built cheaply. We probably need to achieve that again, and do better than we did during a war that was diverting supplies away from the effort.
How do we achieve that? I don't know.
Capital gains taxes range from 0-20% Federally, depending on your income. In Cali, the addition is up to 13%
Which means that worst case scenario, you sell a property in Cali, you would pay 33% of the profiit above the original price of the house and the 500,000 exemption. So on a house you bought for 100,000 and sold for 1,000,000, you'd pay the awful, awful price of... 133,000, leaving you with a paltry $867,000.
Ah; but did you forget you pay income tax on top of capital gains taxes?
You literally don't for long-term capital gains.
nor does the capital gains affect your 'regular' tax bracket.
Lol holy shit I can't believe u said something this fucking stupid....hahaha
Have you tried learning how something works before forming an opinion on it?
Capital gains are capital gains not income (earned wages), so no they aren't taxed as income which is why they're called "capital gains taxes" and not "income taxes."
capital gains tax rates are a lot lower than that. https://en.wikipedia.org/wiki/Capital_gains_tax#United_States
these people are mostly greedy fucks that don't want to pay their very reasonable share of taxes on their investment return.