Three Financially Sound Reasons Seniors Should Consider Selling and Buying in 2010

Three Financially Sound Reasons Seniors Should Consider Selling and Buying in Spirng 2010

By Michelle C. Carr-Crowe

I’ll make it brief and to the point: there are three financially sound reasons every homeowning senior should carefully consider selling, and also possibly buying, in spring 2010.
For example, 2010 is a good year to sell, and possibly also buy, in Saratoga, San Jose, Los Gatos, Campbell, Palo Alto, Santa Clara or Monte Sereno if you meet one of the following criteria:
1) You plan to sell and want to buy another property, especially if the new property will be less than $800,000, and/or
2) You have significant equity built up and want to save capital gains tax, as the existing benefit ends at the close of 2010
3) You are 55 or older, blind or disabled, and plan to sell in Santa Clara County and buy a home for the same price or less in Santa Clara County or one of six other participating counties in the Proposition 60 & 90 program.
Currently, there is a new, limited-time tax credit available to homeowners selling and buying a property (both must close by April 30, 2010). This window is open for about another 75 days.
Many people assume the capital gains tax we’ve had in place for years will remain with us indefinitely. Not true. The capital gains tax benefit that allows a single person to keep up to $250,000 in tax free capital gains, or a married couple can keep up to $500,000 in gains is set to automatically expire on December 31, 2010.
Although the real estate lobby will push for extension or expansion, given the current poor state of the economy, many are concerned about the perception that this is a “rich person’s benefit,” making it difficult if not impossible to garner support.
Sales of assets held more than 12 months and sold on or after May 6, 2003 qualify for the 15 percent capital gains rate (5 percent for lowest income taxpayers and zero percent beginning in 2008). The capital gains rate reverts to 20 and 10 percent for assets held for more than 12 months and sold after December 31, 2010.
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