4 ms·

I'm looking at the exact same source you are. What part of what I said is not correct, exactly? The capital gains are $1 million. $500k of it is excluded (as

I'm looking at the exact same source you are. What part of what I said is not correct, exactly? The capital gains are $1 million. $500k of it is excluded (assuming you're married filing jointly). The rest gets taxed. If you think that's incorrect, what do _you_ think happens with taxes when selling a home for $2 million that was bought for $1 million?

mbesto 9y ago
> I said = 2017 - Sell house for $2M > I said = 2017 - Buy new house for $1M > you said = But it might be (for the "buy new house") $1.6 million, not $1 million, in your example... > I said = so they can still afford it. > you said = You don't get to keep the whole $2M. That's the point. So, let's do this again. 1. Sell house for $2M 2. Buy house for $1.6M as you suggested 3. Congrats you now have $1.6M in illiquid assets and $400k in liquid assets (cash) Note - I recognize that my original example was buy at $1M and sell for $2M, where you are correct you're not taxed on the first $500k and the remaining $500k is taxed at capital gains. I also recognize that this whole scenario is purely illustrative and doesn't take into acount all of the transation fees.