Many U.S. residential real estate markets have advanced a great deal. In many areas, values have surpassed previous highs reached before the 2008-2009 financial crisis.
And then you have the fact that many principal residences have been held for a relatively long time and are now worth far more than they cost.
If you own one of these highly appreciated homes, selling could trigger a big federal income tax gain well in excess of what you could shelter with your principal residence gain exclusion ($250,000, or $500,000 for joint filers).
On gains in excess of the exclusions, you could suffer substantial tax bills (federal and state, unless you live in a state with no income taxes).
You may wonder, “Is there anything I can do to avoid this big tax hit?” Good question. The answer is yes, as you will learn in this article. ... Log in to view full article.
