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Judi Monday, Your Green Valley AZ Expert

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English Cottage-Style Garden Takes Root

by Judi Monday, Your Green Valley AZ Expert

A New Take On Shiplap & Hexagon Tiles In The Bathroom

by Judi Monday, Your Green Valley AZ Expert

How Hight Should You Hang Your Upper Kitchen Cabinets?

by Judi Monday, Your Green Valley AZ Expert

How To Choose The Right Gravel For Your Garden

by Judi Monday, Your Green Valley AZ Expert

House-Hunting Checklist: 10 Essentials To Bring On Your Search

by Judi Monday, Your Green Valley AZ Expert

8 Patio Arrangements To Inspire Your Outdoor Room

by Judi Monday, Your Green Valley AZ Expert

Case Study-Housing Decision During Retirement

by Judi Monday, Your Green Valley AZ Expert

Case Study - Housing Decision During Retirement

A couple is planning to tour the United States in a travel trailer during their first few years of retirement. They are going to sell their current home now and purchase another home when they finish their travels. 

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An interesting exercise is to determine the optimum time of selling the home: now or when they're ready to buy their replacement home.

If they intend on traveling for more than three years, then, it may be a good decision to sell prior to the sojourn to avoid paying taxes on the gain in their home. IRS allows for a temporary rental of a principal residence while still keeping the $250,000/$500,000 capital gains exclusion intact. A homeowner must own and use a home for three out of the previous five years which means that it could be rented for up to three years, but it would need to be sold and closed before that three-year window expires.

If the travel will be less than three years, there is an option of selling now or later. Using the example below, the homeowner sold the home, paid their expenses and invested the proceeds in a three-year certificate of deposit until the replacement home was purchased.

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As an alternative, if the homeowner rented the home, not only would they have income, the home would continue to appreciate and the unpaid balance would go down resulting in larger net proceeds. Based on a 5% appreciation and continued amortization of the mortgage, the net proceeds could easily be $40,000 more.

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Obviously, there are a lot of considerations that affect the decision to sell now or later but in an appreciating real estate environment, being without a home for several years could affect the financial position of the owner in the replacement property. It is certainly reasonable to look at various alternatives before making a decision. Call me at (520) 241-7780 to help you look at the different possibilities and talk to your tax professional.

What To Know About Growing String Of Bananas Plant

by Judi Monday, Your Green Valley AZ Expert

Decluttering Help: What To Do When Nothing 'Sparks Joy'

by Judi Monday, Your Green Valley AZ Expert

10 Inspiring Setups For Outdoor Dining

by Judi Monday, Your Green Valley AZ Expert

Displaying blog entries 1-10 of 580

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Judi Monday
RE/MAX Valley Properties In Green Valley, AZ
210 West Continental Road
Green Valley AZ 85622
Direct: (520) 241-7780
Fax: (520) 648-2221