Updated almost 8 years ago on . Most recent reply
Sell with $500k for tax benefit?
My primary home has gained its value more than 500 K since my purchase. Further gain will be taxed as ordinary income. Should I sell the current home and buy a new one to take advantage of the tax benefit again?
Most Popular Reply
Not a good idea. Any SFR in Bay Area goes for over $1M. Let's say you bought your property for $1M and its valued at $1.5M now. Here are the reasons:
1) Buy selling it now and then buying another property at $1.5M would increase your property taxes as property taxes would go with purchase price of $1.5M whereas you most probably will be paying way less taxes on your current residence.
2) you would be starting a new mortgage cycle and adding another 30 years of interest. You should know that with any mortgage, significant part of interest is charged up front.
3) you can't write off interest on new mortgage originated over $750K. This is another big issue in SF BAY AREA.