Q: We plan to sell our house in 2023, w/a capital tax gain of $1MM. Should I NOT work in 2022 to fall in the 0% tax rate?
I can afford to not work. But a past employer wants me to work for them. Ideally, i want my taxable income to be as low as possible when i sell our house, correct?
A: If this home qualifies as your primary residence, you will qualify for a capital gain exclusion of $250k, if single, or $500k, if married. If this is an investment property, you may defer taxable gain by doing a 1031 exchange. There are also ways to change the characteristics of properties in order to qualify for both exclusions. A savvy Realtor should be able to help you but you should also consult with a tax expert.
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