So you’ve lived in your house forever and have a lot of equity in your home. You don’t want to move because you don’t want to pay the capital gains on the appreciation your home as seen over the years. If I have a dime for every time I heard that one… It’s becoming very common in the Bay Area where home prices have appreciated so much that many folks are having this problem. Not a bad problem to have, but folks may want to move and pay don’t want to pay taxes.

A couple things to think about to help resolve this issue. First off, talk to your Realtor. Get an estimate of what your sales price and selling costs will be. Calculate what amount the capital gains will come to. Then chat with your CPA about what the tax burden will actually be. Section 121 in the Internal Revenue Code, allows for the exclusion of gain from the sale of property owned and used by the taxpayer as the taxpayer’s principal residence for two of the five years preceding the sale (The excludible amount of gain is $250,000 for single filers and $500,000 for a husband and wife who file a joint return.). After that, you are taxed. It may not be as much as you think, but wouldn’t it be nice to know how much.

If you feel the tax burden is still too high, you might consider offering seller financing to a potential buyer who is interested. This basically makes you the bank. It will spread your capital gains out over time and allow you to spread out your tax implications. There are many ways to structure the financing, but ultimately allows you to take the property back if the buyer defaults. You will need to talk to an attorney to be sure you are protected, but it will open up many possibilities and let you move on from your home and collect the income.

Don’t let taxes hold you back from selling your home and getting what you want. Talk to a Realtor to get more info and learn about all your options and the endless possibilities.