A Time to Rent, A Time to Sell
posted at 4:05 pm
on Mar. 8, 2007
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So, Susie and I are going to be putting our Pasadena house on the market.
Our current tenants were going to move out at the end of April, but I think now they might be getting ready to leave at the end of March. Which means we’ll be heading down to L.A. at the end of March, early April, to get the place into shape to sell.
Why are we selling? Well, mostly because when you sell a house, and if you’re making a profit, you pay tax on the profit called “capital gains tax.” But if you’re selling your primary residence, you don’t have to pay capital gains tax on the first $500,000 of profit. Like, that’s a lot of tax-free profit.
Now, to be considered a primary residence, you have to live in the house for 2 of the past 5 years. We’re coming up to the end of that 2-out-of-5 year period, and if we don’t sell now, we lose that tax exemption. So financially, it makes a lot more sense to sell than to hold it, unless we go on holding it for years and years and renting at a profit, or unless the market continues to go up and up.
Neither one sounds too likely. So we’re selling. But it makes me sad because our house was such a wonderful place. It really was the first “home” we lived in, and it made a lot of things possible for us—a home office, having Susie’s brother come and live with us for a summer, having my sister Staci come and live with us… These are all things that I’ll remember about our place forever.
Meanwhile, though, I’m thinking about finding a painter, finding someone to fix the air conditioning, finding someone to replace the tiles that fell off our pool… ah, the joys of being a home owner, even if only for a few more days…
