How to (legally) avoid taxes when selling a house

The video tutorial explains how to minimize capital gains taxes when selling a house. It presents a scenario where a condo bought for $75,000 is now worth $160,000, leading to an $85,000 gain. The video explores three options: moving into the property to qualify for a tax exemption, using a 1031 exchange to defer taxes by buying a similar property, and documenting costs to reduce taxable gains. It emphasizes the importance of finding the right strategy and not letting tax concerns hinder property sale plans.

What is the primary concern when selling a property for a profit?

• Finding a new tenant

• Locating a new property to buy

• Paying capital gains taxes

• Renovating the property

What is one way to avoid paying capital gains taxes when selling a property?

• Renting it out for a year

• Moving into the property for at least two years

• Selling it to a family member

• Donating it to charity

What are the two tests required to qualify for a tax exemption when moving into a property?

• Renovation and sale tests

• Financial and location tests

• Ownership and use tests

• Income and expense tests

What is a 1031 exchange?

• A method to sell a property and buy a similar one without paying taxes

• A process to renovate a property before selling

• A strategy to donate a property to avoid taxes

• A way to rent out a property for a year

How can documenting expenses help when selling a property?

• It can reduce the overall capital gains tax

• It can increase the property's sale price

• It can eliminate all taxes

• It can extend the selling timeline