Right now there are tens of thousands of older homeowners in CA who won’t sell their home until one spouse passes away. The reason: capital gains taxes. If they bought a home in the 80’s for 200k & it’s worth 2M today, they would be dumb to sell even if it’s too big for them. 🧵
Under current law, each homeowner spouse gets a 250k deduction on the sale of their primary residence. In the example above, a 1.8M gain, minus a 500k deduction, minus costs of sale = state & fed taxes on a gain of 1.1M (about $350k in taxes). Thats a ton of money!
Under current law, if the couple waits until one spouse dies, & the property is held as community property, it gets a step up in basis to the date of death value of the deceased spouse. The survivor can sell the home right after their spouse dies & pay *ZERO* capital gain taxes!
This results in bad policy outcomes: seniors are living in large, underutilized homes, during a housing crisis, while young, growing families are cramped into tiny apartments or homes they’ve outgrown. There is a way to solve this that could satisfy both the left & right…
Congress must increase the 250k primary residence exemption to 1M per spouse! The amount hasn’t increased since 1997, while home values have skyrocketed ever since. Dems will be happy since it will lead to more sales, ease the housing crisis, & reduce the cost of homeownership.
Republicans will like it because…it’s a tax cut!
This is a win-win policy that should be able to earn bipartisan support.
If you’re connected to the @KamalaHQ @KamalaHarris campaign, you may want to share this idea. It will DEFINITELY win over independents in swing states 😉
This is a win-win policy that should be able to earn bipartisan support.
If you’re connected to the @KamalaHQ @KamalaHarris campaign, you may want to share this idea. It will DEFINITELY win over independents in swing states 😉
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