Two mortgage payments would have saved this client $42,000
A client sold their home after 22 months of ownership. Two months short of the two-year mark, the gain did not qualify for the home-sale exclusion, and the sale cost roughly $45,000 in capital gains tax. Had they called before signing, two more mortgage payments of about $1,500 each — $3,000 in all — would have carried them past the line and saved around $42,000 after those payments.
We could not fix it afterward. Nobody can. That is the whole argument for planning: the call before the transaction is worth more than any work we do after it.
This example reflects one client’s specific circumstances. Eligibility for the home-sale exclusion — and the tax saved — depends on each taxpayer’s own facts; a sale before two years can still qualify for a partial exclusion in cases such as a work relocation, health, or other unforeseen circumstances.
Tax that could have been avoided on one sale, net of the two extra payments — the difference between calling us before closing and calling us the following January.
