[Roberton3]

...I have a friend who is being recruited to a faculty position in Denver, and the real estate agent who they met with said that she would not be able to find a house as modest as they have now (they have a three bedroom/~1500 sf house, which, because they have no kids, is plenty comfortable for them) for the amount of money they have available.  So, they have to weigh getting more of a house than they need or want versus paying taxes on the capital gains from the house they bought...

This is going well OT, but your friend should talk with a competent tax advisor.  Based on what you wrote, it sounds like he/she is basing decisions on a tax law that was changed almost 20 years ago.  Under current law, the purchase price of your new house has no effect on whether you'll pay capital gains on the sale of the old house.

[Roberton3]

...I have a friend who is being recruited to a faculty position in Denver, and the real estate agent who they met with said that she would not be able to find a house as modest as they have now (they have a three bedroom/~1500 sf house, which, because they have no kids, is plenty comfortable for them) for the amount of money they have available.  So, they have to weigh getting more of a house than they need or want versus paying taxes on the capital gains from the house they bought...

This is going well OT, but your friend should talk with a competent tax advisor.  Based on what you wrote, it sounds like he/she is basing decisions on a tax law that was changed almost 20 years ago.  Under current law, the purchase price of your new house has no effect on whether you'll pay capital gains on the sale of the old house.