Comments on: Renting vs Buying a Home: A Detailed Calculation

By: Steve Austin

Steve Austin — Wed, 10 Oct 2007 21:13:13 +0000

LargeTalons, they may be operating on old information. As you probably recall, prior to the 1997 Taxpayer Relief Act, there was some rule that required a home to be replaced by something of equal or greater value in order to not have to pay capital gains taxes on the prior sale. In short, Casey & husband didn’t really have to buy within 2 years in order to enjoy the $500k home sale gain exclusion.

By: LargeTalons

LargeTalons — Sun, 07 Oct 2007 21:08:17 +0000

Not sure I understand the response about the exclusion. You state above that you have two years before the capital gains on your first home become taxable income. If your first home was both owned by and occupied by you for two years then you have a $500K capital gains exclusion on the sale of that home. That means your gains are NEVER taxable, not sure where you’re getting that two years from sale figure. Could you be confusing this with the 2 out of 5 rule? This rule for the capital gains exclusion states that you had to both live in and own your home 2 out of the last 5 years at the time of the sale to get the exclusion. So, if you moved out of your house after two years and rented it out, you would have 3 years to sell before your exclusion would expire.

By: The Financial Blogger | September Top Ten Posts

The Financial Blogger | September Top Ten Posts — Mon, 01 Oct 2007 11:11:36 +0000

[...] Renting vs Buying a Home: A Detailed Calculation by Clever [...]

By: Casey

Casey — Sat, 22 Sep 2007 15:25:03 +0000

@ Steve Austin

Sorry for the delay on responding – I can only wish we made a profit like that on the house, but the fact is, it was the living in the first home

By: The Friday Gathering for 9/14/2007 | Gather Little By Little

The Friday Gathering for 9/14/2007 | Gather Little By Little — Fri, 14 Sep 2007 12:22:18 +0000

[...] Clever Dude provides a detailed comparison on renting vs buying a home [...]

By: Steve Austin

Steve Austin — Thu, 13 Sep 2007 15:39:36 +0000

Thorough post, but something threw me: did you factor in the $500k home sale gain exclusion? I don’t want to pry into your home sale numbers, but I would be floored (even with the bull RE market in recent years) if you exceeded the $500k gain on the sale of your first home, if it was your primary residence, and if you hadn’t invoked an exclusion on another home within the prior 2 years. I am also making an assumption that you and your husband file US taxes jointly; the excludable gain for filing separately or single is $250k.

By: Money Links For 09-13-07

Money Links For 09-13-07 — Thu, 13 Sep 2007 12:09:50 +0000

[...] Renting vs Buying a Home: A Detailed Calculation by Casey (as a guest blogger) @ Clever Dude. This stuff is pretty detailed – without a lot of confusing numbers. [...]

By: fiscal musings

fiscal musings — Wed, 12 Sep 2007 03:57:23 +0000

I’m usually a proponent of buying a home, but there are certain situations where renting can be better. I’m looking at going back to school to get an MBA and for those two years it’ll probably be better to rent. Overall, nice post.

By: The Decision Strategist

The Decision Strategist — Tue, 11 Sep 2007 17:10:37 +0000

Good post. I have a spreadsheet that calculates whether it’s better to rent or buy depending on your net worth for each option here: http://tinyurl.com/2q9nc6.

There are also some online calculators, but sometimes it’s hard to see their assumptions. This one’s not bad: http://tinyurl.com/232ojc.

By: Finance Spot » Archive » Late breaking news

Finance Spot » Archive » Late breaking news — Tue, 11 Sep 2007 16:01:00 +0000

[...] Renting vs Buying a Home: A Detailed Calculation [...]