
A RETIRED couple was forced to delay the sale of their home, and the decision could benefit them financially.
The pair’s pause on the house sale was strategic, as it helps them avoid a bill worth hundreds of thousands of dollars.

A senior couple has delayed the sale of their home until recently (stock image)[/caption]
Joel and Kathryn Friedman are anxiously awaiting their move to a 55-plus community this year according to what they told Business Insider recently.
The 71-year-old couple has been preparing to downsize for several years, but waited to list a five-bedroom, 5,000-square-foot property in Southern California for several years.
But, why the hold off?
Most of the reason for the Friedman’s decision comes due to the about $700,000 they’d be required to pay in capital gains tax.
Capital gains tax is a type of tax placed on the sale of an asset that was higher than the price originally paid for it.
This applies to investments like stocks, real estate, or even collectibles like art or jewelry.
The tax is only due whenever the asset, which in the retiree’s case would be the home, is sold or “realized.”
There are also three crucial factors that determine capital gains tax: the length of time the asset is owned, otherwise known as the holding period, taxable income level, and marital status.
In the case of the retired couple’s Southern California residence, profits from any home sales over $500,000 since 1997 for married couples are subject to capital gains tax of around 20%.
Since the threshold hasn’t been moved for 28 years despite inflation and skyrocketing home prices, more home owners now than ever are paying the tax compared to when it was first put in place by the federal government.
Some economists have noted that those in a similar situation to the Friedman’s holding off on the sale to avoid the tax has even created a shortage in the family-sized home market, especially in California.
“There are a million reasons why we’d like to move, but we’re not because the tax is just burdensome,” Joel told Business Insider.
Still, the couple decided to take the chance in May, listing the home for $4.5 million and fully prepared to pay around $700,000.
The $700,000 comes from the history of the home, which Joel and Kathryn bought in 1990.
How can your home be sold without your consent?

Your home can be sold from under you for various reasons – here are three key things to look out for:
Tax Sale
- A tax sale is the sale of property by a governmental entity to recover unpaid taxes by the owner who has reached a certain point of delinquency in their owed payments.
- Before a tax sale takes place, there is a right-of-redemption period where the owner can pay off their debt and reclaim their home.
- Each state has different laws surrounding tax sales but in most areas, the basic requirement is that adequate notice is given to the owner to pay the outstanding money, and any sale must be open to the public.
Foreclosure
- Foreclosures can take place when lenders take control of a property after borrowers have failed to make their repayments.
- Borrowers will receive a Notice of Default, triggering the foreclosure process.
- Homeowners in HOA communities can also see their homes foreclosed by their HOA for falling behind on fees.
- This means that even if you keep up with mortgage repayments, you could still lose your home if your HOA has a lien on your property.
- When such a foreclosure takes place, the sale price only needs to be enough to cover the HOA debt meaning that properties can be sold for much less than they are worth.
Property Fraud
- Criminals can use a fake or stolen ID to impersonate a homeowner in order to sell or mortgage homes.
- Typical targets for property fraud include absent owners like landlords, owners who live abroad, and sole owners of unmortgaged homes.
- The U.S. Sun previously reported on a man whose vacation home worth $300,000 was sold by criminals for just $9,000 – they even had the deed to the property.
They spent around $1.8 million over the years for the home itself, along with renovations and improvements.
That means the estimate is that the capital gains tax would apply to around $2 million worth of profit after exemptions, meaning along with a net investment tax, the bill would reach the six-figure number.
Only $400,000 would be from federal capital gains tax and then $200,000 from California’s state capital gains taxes.
It could be even more though, as Evan Liddiard, director of federal tax policy at the National Association of Realtors and a certified public accountant, placed the estimate at over $800,000.
LAW LIBERATION
Except, in July, things started to change when Representative Marjorie Taylor Greene (R) announced a bill to eliminate federal capital gains tax on home sales.
The legislation isn’t finalized yet, and while President Donald Trump has noted that the bill could improve housing sales, it’s unclear if Congress will consider it.
The Friedman couple is now hoping that they don’t get any hits on their $4.5 million home and the listing instead expires, just in time for the law to change.
Not to mention, the pair wants the home sale profits to serve as a massive chunk of their retirement fundings aside from other savings, investment accounts, pensions, and Social Security benefits.
The pair is specifically concerned that tat Social Security payments and Kathyrn’s pension won’t cover long-term healthcare bills.
ANOTHER OPTION?
Even so, experts like Liddiard argue that Greene’s proposed bill won’t fix the housing market problem, noting eliminating capital gains tax or increasing the exclusion threshold “is not a cure-all.”
Representative Jimmy Panetta (D) introduced a different bill in 2022 that would increase the tax exclusion threshold to $500,000 for individuals and $1 million for couples, and it would be indexed for inflation.
Liddiard argued in favor of Panetta’s as it “would solve most of the problem,” significantly reducing the number of homeowners who’d be subject to the capital gains tax when trying to sell.
Despite the market difficulties, homes are still attracting buyers.
Earlier this year, a $600,000 four-bedroom property with a pool was listed for sale with stunning views, but it comes with a warning.
There was even a listing on eBay for a “cozy” tiny home with an “inviting porch” for just $29,986.