Tax free gain on the sale of your personal residence:
One of the best ways to build tax free wealth is through real estate.
Specifically, through the sale of your personal residence. When you sell your primary residence and make a profit on the sale, this is referred to as capital gains. Capital gains are usually subject to capital gains tax. However, there are special rules that apply to the sale of a primary residence.
If you are single and make a profit of $250,000 or below on the sale of your home, the capital gains are tax free. If you are married and make a profit of $500,000 or below, the capital gains are tax free. The profit must be be within these limits, anything over will be subject to capital gains tax rates.
Another important rule that applies to this concept is that, you must have lived in the primary residence for 2 out of the last 5 years.
Another thing to consider, is that there are no limits to the amount of times you can repeat this process. So, you could theoretically move every 2 years if that is something that interests you.
We hope that this helps, and if you have any questions, feel free to reach out.