Ep.#116: Real Estate Tax Planning: Exclude up to $250k or $500k of Home Sale Gain with Andy Panko, CFP®

In this episode of The Hawaii Retirement Show, host Jason Cutitta, CFP® is joined by Andy Panko, CFP®, host of the Retirement Planning Education Podcast, to discuss real estate tax planning and the Section 121 home sale exclusion. Andy joins the show to explain how homeowners may be able to exclude up to $250,000 or $500,000 of gain when selling a primary residence, and why the rules are often more complicated than people expect.

The conversation covers how capital gain is calculated, the importance of basis and home improvement records, the ownership and use tests, and common planning issues when a primary residence is converted to a rental property. Jason and Andy also discuss depreciation recapture, nonqualified use, inherited property, gifting real estate to children, 1031 exchanges, selling a home in retirement, and how a large real estate sale can affect taxes, Medicare IRMAA, and overall retirement cash flow.

Example 1: Section 121 Partial Exclusion

Example 2: Section 121 Non-Qualified Use

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