Banking gains

Owning a home in California has been an incredible wealth generator over the years...just look at the graph above. California has had quite the run, and despite its current challenges, it's hard to bet against the Golden State long-term.

Considering selling your primary residence? Just wanted to give you a heads-up about something important - long-term capital gains taxes. They come into play when you sell your primary home, as long as you’ve lived there for at least two out of the last five years.

Here’s how it works: Assuming you meet the criteria above if you’re single and your profit is over $250,000, you’ll have to pay capital gains taxes on the sale. For married couples filing together, it’s any profit over $500,000 that you'll get taxed on. But don’t forget, you can add any money you’ve spent on qualifying improvements to your original purchase costs before you calculate your profit. So, your total cost isn’t just what you paid for the house, but also includes those improvements you made while you owned it....hopefully, you've saved your receipts.

But remember, tax stuff can get tricky and everyone’s situation is unique. So, for the most accurate info and advice, it’s always a good idea to chat with an accountant or tax advisor.