Confused by 8/12 show - Rachel and John seem to imply that equity (mortgage balance) impacts capital gains. The caller’s husband was worried about the mortgage balance going below 250k because it would cross the capital gains exemption…. But capital gains is just sale price minus cost basis. What’s the deal?
Rachel and John. Caller says “husband doesn’t want to pay off house because we just hit 500k in equity.” Rachel and John just go with it. ARE YOU KIDDING ME??????? Capital gains on a home sale is based on basis and sale - your mortgage doesn’t matter. There is no way their 750k house had a 500k gain so there’s no way they exceed the married exclusion of 500k. How are these people on the air for a financial show. I heard Rachel kind of pondering the whole capital gains thing at the start but her mind sputtered out on it. John had no clue.
In my career, I study and learn to stay current. How do these people not know such a basic thing? That would have handled the call immediately! “Hey lady, tell him you won’t owe capital gains based on your mortgage - or at all.”
I don’t think she’s ever had to plan paychecks. Anyone who’s ever been middle class knows the feeling of the joyous three-paycheck month twice per year. She had no idea what her dad was talking about on that question or why 26 paychecks would make 2 months different.