And if you make a profit on that sale, you might not have to pay any taxes on that money that you receive.
Here’s what the Internal Revenue Service says:
“If you have a capital gain from the sale of your main home, you may qualify to exclude up to $250,000 of that gain from your income, or up to $500,000 of that gain if you file a joint return with your spouse.”
This “sell high” scenario sounds pretty good but there are two problems: 1. Where will you live after you sell?; and 2. Can you buy low after you sell high? (Answer: If it’s still a seller’s market, probably not).
But here are some ideas about where you can live:
• Live with your adult children for some time while you are looking for your new home.
• Lease back your home after you sell it until you find some place that satisfies your needs and wants.
• If you qualify, move to an active lifestyle “55 and over” community with a lot of amenities (like Sun City Hilton Head).
• Some 55-plus communities offer home-buying or home-renting options (homes, cottages, townhomes, condos).
• Think about right-sizing and buying a single-family home, townhome or condo closer to your family.
• Explore independent living opportunities in other towns. Consider renting an apartment for a year or two in an area that you would love living in.
• Rent or buy an RV and tour our great country for a year or so. There are plenty of places to see and stay; then decide where you want to live after your adventure.
• If you love where you are currently living but need and/or want that gain from the sale of your home, think about right-sizing – buying a smaller home and aging in place.
• If you are thinking that you might need some assistance down the road, think about independent living that allows transition to assisted living.
Larry Stoller is a broker and Realtor with Real Estate Five of the Lowcountry. Larry@RealEstateFive.com, RealEstateFive.com, SunCityOpenHouses247.com