Dear Sue,
My wife and I have lived in the same home in Auburn for the last 18 years.
We occasionally talked about selling and moving closer to our children and grandchildren. We never acted on it because we really love it here.
Everything has changed. My wife passed away very suddenly a couple of months ago. The kids are hounding me about selling and moving closer to them before something happens to me.
I don’t want to make any rash decisions. I have always been one to think things out.
Since my wife has passed I need to know if I will be able to get the full $500,000 tax free gain when I sell our home.
A buddy of mine said that I will probably only get $250,000 because the $500,000 tax free gain is for couples.
In spite of the economy, we have quite a bit of equity and since our children live in such an expensive area, I will need every penny that I can get.
Please advise.
~ Planning Paul
Dear Paul,
You have my condolences for the loss of your wife. I can’t imagine how difficult it must be for you. You are very lucky to have children that care about your well-being.
My first bit of advice would be to consult your estate/tax attorney.
According to the California Association of Realtors’ legal department, the tax code referencing the treatment of capital gains on personal residences was amended in 2007.
The amendment now allows the full exclusion of $500,000 in capital gains tax if your home is sold within two years of your spouse’s death. This applies only for sales after December 31, 2007.
If your goal is to sell your home and move closer to your children, you need to get started.
Call your Realtor and find out what you need to get done before actually putting your home up for sale. Get ideas for de-cluttering, cleaning, fixing or staging.
Whatever you do don’t get greedy. If the estimated value of your home is $800,000, list it at $789,000 not $850,000.
The lower price will net you a quicker sale and will be more than offset by the $500,000 tax-free gain.
If getting every penny is important to you, consult your tax professional and remember, top condition, top dollar.
It’s a matter of good Home $$$s and Sense.
Sue Thompson is owner and sales manager of HomeTown Realtors in Auburn. She can be reached at seesue@seehometown.com, or on the Web at homedollarsandsense.com.
