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I would like to see the 1031 exchange become available for people who intent to occupy their properties. It makes no sense that someone could own and live in a
by amluto 4y ago
I would like to see the 1031 exchange become available for people who intent to occupy their properties. It makes no sense that someone could own and live in a home for 50 years, want to trade for a smaller home, and be unable to afford the taxes.
- rhino369 4y agoYou get a 250,000-500,000 exemption for a home you actually live in for 2 years.
- amluto 4y agoTell that to someone who lives in a perfectly ordinary, well maintained single family house in what is now an expensive part of the Bay Area that would sell for $3.5M, and whose basis is essentially zero. If they want to move to a nice condo selling for $2M, they can probably squeak by, but most of that $1.5M gain will disappear. This is a problem for people who want to move. But, and this is mostly speculation, this is bad for everyone else too. It makes the market less liquid, which means that people are less likely to live where they want. It also reduces the incentive to build the kinds of units people want to live in. Suppose you want to build 100 nice condos. It’s harder to sell them to existing homeowners, and, in turn, those owners’ homes don’t go on the market. With fewer houses on the market, a smaller stream of buyers with lots of money can keep buying houses at unreasonable prices, and the market prices get pushed up.
- ericd 4y agoBetter would just be making gains due to inflation tax-free - it makes no sense that capital gains aren't indexed to inflation. Tax the real gains, not the nominal ones.