#FinancialAdvice #InheritancePlanning #RealEstateInvesting
Hey there! 🏡💰 So, I recently inherited a house in California and I’m looking for some advice on how to best utilize this inheritance. Here’s a little background on my situation:
– I have a million-dollar house in California
– I have around $150,000 in the bank
– I am unable to work due to a back injury
– I am considering selling the house and buying a cheaper one in the northwest
I want to avoid capital gains and reinvest most of the money. Here’s what I’m thinking:
1. Sell the house in California
2. Buy a $450,000 house in the northwest
3. Invest the rest with a company like Charles Schwab
I’m a bit overwhelmed with the process, especially since I’m not too familiar with financial matters in the US. Any advice on how to proceed with this plan? How can I avoid capital gains and make the most out of this inheritance?
Any insights or suggestions would be greatly appreciated! Let’s discuss and help each other out. 🤔💡
Your cost basis is whatever the house was worth when you inherited it. If you’ve had it as your primary residence for the last 5 years (or even for 2 of the last 5 I think) then you don’t pay taxes on the first $250k of capital gains from the sale of the house. So it sounds like you’ll avoid most or all of the capital gains taxes.
You can sell your California house and potentially exclude up to $250,000 of capital gains since it was your primary residence for five years. Use the proceeds to buy a new home in the Northwest for around $450,000, and invest the remaining funds with a firm like Charles Schwab. Ensure you consult a tax professional to understand and manage any tax implications. Create a budget for your daily expenses, maintain an emergency fund, and consider your healthcare needs given your back surgery and current inability to work your previous job. This plan will help you reinvest your money wisely and ensure financial stability in the USA.