Home Sale Capital Gains Exclusion -121 Exclusion Explained

Real Estate: Section 121, or the home sale capital gains exclusion, is one of the single largest tax benefits available for homeowners. This video explains in detail the IRS parameters and guidelines. There are some pros and cons in taking this exclusion.

This video reviews what the IRS guidelines are for taking the 121 exclusion. Also a reminder of what the downside might be for those homeowner investors out there.

A Section 121 Exclusion is an Internal Revenue Service rule that allows you to exclude a gain of up to $250,000 from the sale of your principal residence from taxable income. A couple filing a joint return gets to exclude up to $500,000.

IRS Website Links:
www.IRS.gov

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💁‍♀️My name is Audra Lambert. I am a South Orange County realtor who focuses in the San Juan Capistrano area. I have over 20 years experience! I love what I do and Love where I live!

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[johnlozano]

I love Probably the only realtor saying..."don't sell your house". I just subscribed

[MONICAANICA]

You are the best mood enhancer for such a sterile subject. You are great. Thank you always for a very valuable info 😍🙏

[maryvegas]

I'll never rent a property out when the government tells renters that they don't have to pay rent and then tell you that you can't evict.

[vinny]

Honestly, I don't really follow, and nor do I see much value in the average Real Estate Agent. But you are different. You actually provide a lot of value on this channel and the knowledge you share. Wow, I am super impressed. I wish I had an agent locally like you. Thank you for sharing this. Here is an idea about selling on a 121. Create a S-Corp and sell it to that entity and rent it out

[MrGregorio]

Thank you! Your video helped me to understand and compare the whole buying again hustle, refinancing costs & benefits, and capital gain exclusions at once. Thank you so much, and you look amazing!

[peteransel]

I would add, if you're going to jump into the multiple property game, each property should be purchased as a separate LLC for liability and tax purposes. Also having a dedicated checking account and credit card for each property makes keeping track of expenses idiot-proof, even for someone who's unorganized and terrible at bookkeeping.

[Tennis-]

You’ve been really awesome! You just earned my subscription 😊 thanks 🙏

[nmwspam]

Best practical video I can find on the subject. Thank you!

[diabloencorbata]

Straightforwardnesses kills complicated jargon anywhere. 👍🏼

[santosfloresjr]

Like your video on capital gains I will be looking closer at my ideas for investing keep up the good work (Whitney tx)

[colettejaques]

Yes...but so many people destroy your property....and stop paying

[abbibrannan]

All in subscriber, echo the previous about NOT Selling! very cool. So yesterday Dave Ramsey told this guy to sell his house in Kentucky, if he wants to buy a 50k tractor and not be in debt. So then I thought maybe I should sell my little beach place. Then today I watched 2 of your podcasts, because you are very pleasant to watch and listen to and so informative. Both of them expressed emphatically your strong emotional regret of selling 5 properties in Orange County. Guess What I sold my beautiful log cabin on an acre of land overlooking a beautiful clear blue lake in N. Idaho, same feeling, except I do not miss the snow. Anyway, finally, I would need to move to the beach for 2 out of the last 5 years, like you said, in order to save on Capital Gains taxes. So Thank You for that advise! This is the long Feb. holiday weekend gonna go to the Beach place and savor the plan although in Long Beach WA we will have a rainy weekend, still fun at the beach. And I love Calefornia, where I lived for about 22 years. People in Cal are some of the most friendly of folks I have ever known. You must know I am making fun of Schwartzenager's accent. Dear Audra, you are the Best!

[mr_smilegaming]

Thank you for this informative video. I have been debating selling vs. renting for a while. I wonder if you rent out for 10 years and move back for 2 years before you sell, do you get capital gains exclusion? I dont want to sell my home in Bay Area where it appreciates like 50k a year. In 10 years, i would have lost 500k if i were to sell it now.

Another question, refinance and give up the low 2.5% interest rate?? That seems expensive. And you can only refi up to 80% of your house market price right?

[Red]

@Audria. We are old with three houses. We plan to sell two and put the proceeds in dividends. We love passive income. We find renters not reliable in keeping paying and in maintaining the properties. How do you feel about our plan?

[jkr]

Can you tell me current laws, if you're 65 yrs. old., selling a rental house, that I did not live in for 2 yrs. I'm in Indiana.

[dinorahmorales]

Thank you! Very informative video!
I also regret selling my properties.

[derekmarlowe]

Leveraging properties with 2nd mortgages and re-financing is risky and can wipe one out in a financial crisis which is unpredictable.

[Carolyn-vhnz]

Hello I read online that if you bought your home Prior to Jan 01, 2009 none of this being in the home 2 of 5 years apply to you. For example if I bought my house in 1999 (which I did), and lived in it for 7 years t hen rented it out, (still rented today), none of this should apply to me and im grandfathered in and can keep any profits I make...is this true? How do you interpret this rule?

[RayMelville]

121 was not intended for house flipping. It is asinine trying to use it for that purpose because you’d tie too much money in houses and if the market turns or interest rates go up you’d be in trouble.

[jeanneroewert]

Just what I wondering about today 😊✨🤙🏾