Too Expensive to Sell a House?

[Goofyhoofy]

@Hawkwin

Based on the 2017–2018 sale price of approximately $7.9 million to $11 million for his Emerald Bay home, insuring Warren Buffett’s former Laguna Beach house today would likely cost over $20,000 to $40,000+ annually.

Not for nothing, but Warren owns an insurance company. A few of them, actually. I bet he knows a guy…

[intercst]

@Goofyhoofy

Not for nothing, but Warren owns an insurance company. A few of them, actually. I bet he knows a guy…

I’m pretty sure that Warren “retains risk” when that’s cheaper than buying the insurance. Even my insurance actuary younger brother cancelled the homeowner’s insurance on his oceanfront home in Rhode Island when the premium got too high.

intercst

[Leap1]

@1poorguy

Yes. But there was a one-time-only exemption from all cap gains taxes on the sale of a primary residence. Looking it up, it clearly is no longer the case. I don’t know when they rescinded that.

I believe you pay capital gains after $500k.

I’ll look it up.
Yes, if you are married filing jointly, you generally pay capital gains tax only on the profit (gain) that exceeds $500,000 ($250,000 for single filers) when selling your primary residence. To qualify, you must meet the ownership and use tests—usually having lived in the home for at least two of the five years prior to the sale.

[image]IRS (.gov) +3

[Leap1]

@McLovin1981

So the question was keep the house vacant until she passes and inherit the house tax free, or sell it and pay the taxes? We figure she’d net about $700,000, and the capital gains taxes would be about $67,000, something like that.

My parents did something similar, moving from CT to MA and renting. The house was worth $530k. Dad figured he could rent for seven years in Boston on Mass Ave. Why own at all? Mass Ave has buses every ten minutes in both directions and Uber. They gave up both cars. Dad had become extremely absent-minded while driving. Both my sisters are in much closer proximity to Mom now than I had been in CT.

[FlyingCircus]

@intercst

(still crying about the 6-figure capital gains tax on my profit from the Avis “short squeeze”.)

Yah, like the old saying from my Depression-era father: crying all the way to the bank.

[albaby1]

@intercst

So Flock agrees that old people should be selling their home, not sit on it?

Well, they want old people to exchange their homes to Flock’s rental pool instead of selling them on the open market. They use the concern about a “tax wall” to heighten that sales pitch.