Problem

An older couple had owned for many years a personal residence now valued at $2.9 million. With their children grown with families of their own, they decided they wanted to downsize to a smaller home and increase their income. They were, however, hesitant to sell after learning that they would still owe more than $300,000 in capital gains taxes after paying off the property’s $1.2 million mortgage.

TaxWealth Solution

The property owners sell their home, defer the taxes and receive more than $1.3 million at close of escrow to invest as they choose to generate more income for retirement.