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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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Oh, no, boomers have to pay taxes on the MASSIVE gains on their cheaply purchased houses now worth millions. Cry me a river.
They already get to exclude $250,000 of increase (or $500,000 if married filing jointly). So a married couple selling a house they bought for $50k and sold for $550,000 pays no taxes at all!
So boomers need to shut the hell up.
Someone needs to go take a few tax and accounting classes.
https://www.irs.gov/taxtopics/tc701
Are you making a mental note to remind yourself to sign up for classes later?
No. What he was failing to understand was that a number of people wind up in a situation where going from the bigger home to the smaller home (after it’s all said said and done) they just barely break even. If they are only going to break even then why down size? Where’s the benefit? Who would say “hey I have an idea, let’s sell this big house, buy that smaller house, and not have extra cash after it’s done “. No one is taking that deal.
Can you explain why a big home would sell for the same/near the same price as a small home in any given location? If that were a reality, then why doesn't everyone live in a 5 bedroom, 3000sqft home like these people?
So if you are ok leaving this tax law in the 90s let's leave minimum wage there too. Can't have it one way, all pay and taxes should be changed as decades move on. You will be in the same predicament 30 years from now.
A half million in tax free capital gains isn’t enough for you? It was already too high in the 90s.
Minimum wage is an absolute measure: a fixed amount not pegged to inflation. Taxes are a percentage, a relative value that adapts to inflation.
I'm all for a relative measure for the minimum wage.
Also, in this scenario the people would be left with $1,620,000 after selling their house, which hardly leaves them without options. I get that they want to stay in that same neighborhood. But the problem they are facing is an enviable one for many less fortunate people.
Federal Minimum wage even today ($7.25) means living $81 above the poverty line of $14,891.
Example of a home seller in the article they are walking away with $1.55m after all taxes paid.
These are not the same.
And why not?
I do agree with this statement. Corporations are taxed way too low, and those at the bottom of the income ladder are subject to the highest taxation relative to their assets needed for basic living.
$1.55m in my pocket after all taxes paid from selling a home would be a wonderful predicament to be in.
Prop 13 made it so their taxes did not change as the decades moved on. Their property was taxed much closer to that $100k value they bought their house than the current ~$2 million it is worth. They should have been paying about $19k each year in property taxes. Instead they were paying less than 1/10th that.