PlannerPlus Property Sales

If you model a property sale in PlannerPlus, you’ll need to include an accounting for any sellers fees and Capital Gains taxes. Since we don’t know the cost basis of your home and whether you might qualify for the exclusion, we’re not accounting for Capital Gains taxes and you’ll want to make sure to do that. If you want to simulate Capital Gains on the sale of your primary residence, you may want to use this workaround.

First, remove the value of your primary residence from Home and Real Estate

Select Rent for your current status and enter $0 for rent. Make sure to enter a Zip code, as this will drive your state income taxation.

Second, create an after-tax account to hold the asset

Step 1: Head over to Accounts and Assets and create an after-tax account

Step 2: Select the Capital Gains tax treatment

Step 3: Give the account a descriptive name, "Primary Residence 1 Main St" for example

Step 4: Add the market value of your home as the current balance of the account

Step 5: Set the rates of return to your housing appreciation rate

Step 6: Exclude the account from your withdrawal strategy

Third, compute the amount of the home sale proceeds that will be subject to Capital Gains Tax. This calculation will vary per user. While we cannot provide specific advice, a simple computation might look like this:

Gross proceeds

- cost basis

- capital improvements

- IRS Sec 121 exclusion

= Proceeds subject to Capital Gains tax

Finally, simulate the sale of the residence

Step 1: Head over to Money Flows

Step 2: Create a Transfer of the amount of the home sale proceeds that will be subject to Capital Gains tax on the date you plan to sell the home FROM the "Primary Residence 1 Main St" account TO an after-tax account with the Ordinary Income tax treatment

Step 3: Head over to Insights > Tax > Gross Taxable Income by Source and validate the Capital Gains