[BostonCard]

[quote author=Boston Card link=topic=14712.msg158231#msg158231 date=1457571038]
...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.
[/quote]

That might have been the real estate agent, pushing them to get more of a house than they need.  But you are correct that the first $500,000 of capital gains should be exempt from taxes.  They bought at a good time, shortly after the bubble burst, and there has been crazy real estate appreciation in the Bay Area in the last few years, but I doubt their gains would be much more than $500k.

BC

[BostonCard]

[quote author=Boston Card link=topic=14712.msg158231#msg158231 date=1457571038]
...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.
[/quote]

That might have been the real estate agent, pushing them to get more of a house than they need.  But you are correct that the first $500,000 of capital gains should be exempt from taxes.  They bought at a good time, shortly after the bubble burst, and there has been crazy real estate appreciation in the Bay Area in the last few years, but I doubt their gains would be much more than $500k.

BC