Here's the scenario . . . You own a home in Piedmont or Crocker Highlands that has appreciated beyond your wildest dreams. While you would like to sell it and realize some of this timely profit, the thought of paying Uncle Sam his share of capital gains doesn't quite appeal to you. (Hmmm . . .)
Capital gains currently allow for $250,000 tax-free profit for a single owner or $500,000 tax-free profit for a married couple every two years!
While that amounts to a good deal of equity, it still may not cover those of you who bought your home 10, 20 or 30 years ago, and have potentially far more!
Have you considered renting your home for a few years instead of selling it? Once your primary residence gains new status as an "income-producing" property, you may defer ALL of your capital gains into a "like-kind" property through a 1031 exchange. "Like-kind" properties can include a duplex, rental unit, apartment house, or a coin-operated laundry mat for that matter! (There's quite a bit of latitude in the term "like-kind.")*
*Please speak with your tax advisor about the implications of a 1031 exchange. For the name of a tax exchange representative, please give me a call.
Sounds interesting, but how do I rent my home? No problem, I just happen to have the perfect solution (you knew it was coming). I am currently assisting a foreign diplomat secure a home in the Piedmont/Crocker/ Berkeley area. The family includes his wife, four children and one beloved elderly dog. They need a rather large home and one in which they can entertain dignitaries. Privacy and security a real plus. They will need it for 3-4 years. If you would like more information, please contact me. Or if you know of anyone who might benefit from such an arrangement (perhaps they spend the bulk of their time in a second home?) please pass this information along. This may be a terrific solution for everyone concerned.
Julie Gardner, referred to as, "the pulse of Piedmont," has been writing The Piedmont Perspective for 9 years.