Tax Implications When Selling Your Glendora Home to Upgrade

Planning your move to a larger home? Understanding the tax implications of selling your current home can affect how much you can put toward your upgrade. The good news for move-up sellers - if you've lived in your current home as your primary residence for at least two of the past five years, you may qualify for significant capital gains exclusions. This means you might not owe taxes on up to $250,000 of profit (or $500,000 for married couples filing jointly). 

However, your tax situation becomes more complex when coordinating a move-up purchase. Consider how the property tax assessment on your new, larger home will affect your monthly payments. You'll want to understand Proposition 13 implications and how reassessment works. Keep detailed records of all improvements you've made to your current home - these can help reduce any potential capital gains by increasing your cost basis. 

If you're considering keeping your current Glendora home as a rental instead of selling, different tax implications apply, including possible 1031 exchange benefits. Timing can also affect your tax situation - consult with a tax professional about whether closing your sale and purchase in the same or different tax years benefits you. 

As your Glendora real estate agent, we can connect you with local tax professionals who understand move-up transactions. Want to understand how taxes might affect your upgrade plans? Contact our team for an initial discussion and referrals to qualified tax experts.