[MightyDog]

Originally Posted by JMintzer

Not on $550K, you won't...

You can make $500K PROFIT on selling your home before paing capital gains taxes...

The 500K profit, before paying cap gain taxes, is for married, filing jointly. For single people, the threshold is 250K profit before the cap gains taxes occur.

[JMintzer]

Originally Posted by MightyDog

The 500K profit, before paying cap gain taxes, is for married, filing jointly. For single people, the threshold is 250K profit before the cap gains taxes occur.

Oh, dear... I ASSumed they the sale/purchase was from a couple, like the majority of Villages purchases (73%)...

Regardless, unless they sold for DOUBLE the price they initially bought, they won't pay capital gains... And I find that is unlikely...

[Randall55]

Originally Posted by JMintzer

Oh, dear... I ASSumed they the sale/purchase was from a couple, like the majority of Villages purchases (73%)...

Regardless, unless they sold for DOUBLE the price they initially bought, they won't pay capital gains... And I find that is unlikely...

It is VERY LIKELY. Most homes in the Villages were bought many years ago. The Covid boom doubled the home values and then some!

Currently, this may be difficult. Inventory has risen tremendously in the past few months causing price reductions. Just a year ago, sellers were cashing-in, BIG TIME. Timing is everything.

[roadrnnr]

Originally Posted by Cliff Fr

Will you be paying income tax on the sale proceeds if you don't reinvest in another house?

No Im under the Capitol Gains req

[Oldnavycdr]

Some folks talk like moving is free, or easy.

[Randall55]

Originally Posted by Oldnavycdr

Some folks talk like moving is free, or easy.

We sold our previous Villages home furnished. We knew we were going to downsize and the large furniture would not fit our next home. Our rental came furnished. We will have very little to move when the time comes. Besides, wife likes to decorate. She would have thrown nearly everything away if we hadn't included it in the sale of our home. Fortunately, the new owners were pleased to have the home furnished.

[Villager1234]

A video that I saw on “inside the bubble”

[jimjamuser]

Originally Posted by MightyDog

I was crunching numbers on this very thing about a month ago and, in some cases, the OP is right.

Don't have the math paper right in front of me but, as rough example: If you have 250 to 300K in cash that you were going to use to buy a house and instead buy a T-Bill or CD for almost 5% that generates $12,500 annually for the 250k and $15,000 for the 300K.

I've seen monthly rents on many decent homes at $2000 so, 24K per year cost to rent. The rents include: water, sewer, trash, landscaping, pest control, amenity fee, repairs and, of course, property tax. Renter pays for electric, cable and internet....as additional cost.

So, if you add all the items the owner covers (that would be additional cost to you if you plunked down the big cash for a home purchase) it starts to get quite interesting to rent. My final numbers were something like $6000 or $7000 net out-of-pocket on an annual basis to rent currently if you don't require large or fancy digs.

Numbers can't tell the FULL story. Let's say that you have a DOG or want to have one. Well, you can't have one at a lot of rentals. A dog protects you, your family, and your personal property. A dog BECOMES part of the family. What is the value of a dog that turns away a potential home break in. Let's say you rent and would like to plant a garden and the landlords say, "no way". If you rent , after 10 years, you have a lot of PRETTY rent receipts and that is ALL. If you purchased your home, you have some equity or may have even paid off the loan. You were able to plant trees and a garden where ever YOU wanted, not what some stranger told YOU to do. YOU have more control over your life and that is PRICELESS !!!!!
.....Having said that, renting for around a year has some benefits because you might find one Village suits your family better than another.

[MightyDog]

Originally Posted by jimjamuser

Numbers can't tell the FULL story. Let's say that you have a DOG or want to have one. Well, you can't have one at a lot of rentals. A dog protects you, your family, and your personal property. A dog BECOMES part of the family......
.....Having said that, renting for around a year has some benefits because you might find one Village suits your family better than another.

Rest easy, Jim, rest easy. I didn't lay-out the entire picture because there was no reason to. I'm not trying to sell anybody anything - just fronting some numbers info that is interesting and viable at this particular time.

There are always a multitude of variables to consider in any scenario. Certainly, some of the buyers in the last 3 years that already re-sold or are now selling probably wish they had rented for a year or more. Such a huge amount of hassle only to take a loss.

But, I do find it fascinating how some here seem to have a compulsion to shoot holes in ideas presented. Not sure why they get so triggered. The conversation might flow better if they posed questions instead of making declarations which often sound like tutorials. Yet, we are all of mature ages here so, not really needed.

[JMintzer]

Originally Posted by Randall55

It is VERY LIKELY. Most homes in the Villages were bought many years ago. The Covid boom doubled the home values and then some!

Currently, this may be difficult. Inventory has risen tremendously in the past few months causing price reductions. Just a year ago, sellers were cashing-in, BIG TIME. Timing is everything.

No one was talking about the re-sale of a home bought in TV...

The poster to whom I responded is a current renter, who commented that he has $550K from the sale of the home he lived in before moving to TV...

No one stated, nor suggested that they had a "Covid Windfall" that netted them $550K after the sale of their previous home.

But, for the sake of argument, let's say the $550K was pure profit. They would only owe capital gains on $50K...

Plus, you have 2 years to buy another home of equal or higher value of your net selling price and you avoid capital gains taxes completely...

[margaretmattson]

Originally Posted by jimjamuser

Numbers can't tell the FULL story. Let's say that you have a DOG or want to have one. Well, you can't have one at a lot of rentals. A dog protects you, your family, and your personal property. A dog BECOMES part of the family. What is the value of a dog that turns away a potential home break in. Let's say you rent and would like to plant a garden and the landlords say, "no way". If you rent , after 10 years, you have a lot of PRETTY rent receipts and that is ALL. If you purchased your home, you have some equity or may have even paid off the loan. You were able to plant trees and a garden where ever YOU wanted, not what some stranger told YOU to do. YOU have more control over your life and that is PRICELESS !!!!!
.....Having said that, renting for around a year has some benefits because you might find one Village suits your family better than another.

Some understand most of us do not have much more time left on this planet. I see nothing wrong with choosing to rent. One poster stated it will make it easier for his children when he passes. Simply go to the bank and divide the funds. No hassle of selling an estate.

Besides, if their social security checks and pensions are footing their cost to rent, what is the problem? They sold their previous homes and want to live cash happy with no hassles of owning. You can't take money to your grave. Live whatever time you have left to the fullest.

[Normal]

Originally Posted by Villager1234

Yesterday I read about the lady who is having problems with house closing
There are alternatives to purchasing. I moved here 2 years ago, finally found a yearly rental
I closed on my house up north last month. Instead of buying a house I am seriously considering renting permanently. A 5% cd pays all of my bills and don’t have to worry about any maintenance,water bills,sprinklers Many of my friends miss activities to meet repairmen. I am a retired tradesman and don’t care if I ever pick up a tool again

Renting is the only way to go in the current market. Prices will go down further. At best the bottom is reached just before fall. Only someone who doesn’t care about money would buy with the prices high.

[mtdjed]

While not rent verses own, would seem that Capital Gain could be an issue for many at a time of lifestyle change.

Isn't the $250/$500K a cumulative lifetime exemption? For instance, I bought my first house around 1971 for @$25,500 but with only a $500 down payment. All subsequent houses (4) prior to The Villages were higher value but were paid for using funds gained from prior sales.

Sold last non-Village home for ~ $650K. Invested ~$350K on the Village house. Just for discussion, if home sold now for $650K, then total gain would be $625 before TV and $300K in The Villages or a total of $925K.

Some improvements made that may have increased value, but nothing significant.

Much of the increase is obviously due to inflation.

Questions.

1/Is the assumption regarding $250/$500K lifetime, correct?
2/ Does the increased value calculation for Capital Gains have an allowance for inflation?
3/Who tracks this maze? Do you need to calculate and report every time you sell? If so, Oops!
4/ Don't we all have to eventually checkout of home ownership? Assisted living, death etc.

[SoCalGal]

Originally Posted by Cliff Fr

Will you be paying income tax on the sale proceeds if you don't reinvest in another house?

You'll be paying long term capital gains tax, not income tax.

[retiredguy123]

Originally Posted by mtdjed

While not rent verses own, would seem that Capital Gain could be an issue for many at a time of lifestyle change.

Isn't the $250/$500K a cumulative lifetime exemption? For instance, I bought my first house around 1971 for @$25,500 but with only a $500 down payment. All subsequent houses (4) prior to The Villages were higher value but were paid for using funds gained from prior sales.

Sold last non-Village home for ~ $650K. Invested ~$350K on the Village house. Just for discussion, if home sold now for $650K, then total gain would be $625 before TV and $300K in The Villages or a total of $925K.

Some improvements made that may have increased value, but nothing significant.

Much of the increase is obviously due to inflation.

Questions.

1/Is the assumption regarding $250/$500K lifetime, correct?
2/ Does the increased value calculation for Capital Gains have an allowance for inflation?
3/Who tracks this maze? Do you need to calculate and report every time you sell? If so, Oops!
4/ Don't we all have to eventually checkout of home ownership? Assisted living, death etc.

Answers:

1. The $250/$500 capital gains exclusion is available for every primary residence house that you sell. There is no lifetime accumulation or limit on the number of houses that you sell. But, you must have lived in the house as your primary residence for 2 of the last 5 years immediately before selling it.
2. There is no allowance for inflation.
3. There is no requirement to report the sale of your primary residence to the IRS unless you owe a capital gains tax on it. There is no maze to keep track of because you can benefit from the capital gains exclusion as many times as you want.
4. Yes, everyone will eventually lose ownership of their house through a sale, a gifting, or death.