Eric P. Feichthaler

Dear Mr. Feichthaler:

Happy New Year! My husband and I bought our home four years ago, right before prices took off in Cape Coral. We cannot believe our home has gone up in value nearly $350,000 since purchase. We find ourselves needing to move back to Wisconsin to be near my parents, and will likely sell our home soon. We are hesitant to sell due to the potential income tax burden. Is there anything we can do to reduce income tax on the sale?

Bonnie P.

Dear Bonnie:

Happy New Year to you as well! First, always better for values to increase rather than decrease when it comes to property values, even with income taxes. Based on your facts, it sounds like you made your home in Cape Coral your primary residence, for at least two of the last five years. If so, you and your husband are each entitled to a $250,000 exemption on profit on sale of the primary residence. Therefore, you will likely have no income tax burden based on the sale of your home. This should give you substantially more money to utilize for a down payment on your new home up north.

As a footnote, since you will be selling after the new year, the new purchaser will benefit from whatever Save Our Homes property tax exemption you have for the coming year. This can also be a potential selling point, since your purchase before the latest boom likely locked you in at a substantially lower taxable value.

I wish you the best on your sale, we note a lot of our buyers currently are from out of state, looking to escape weather, taxation or both!

Eric P. Feichthaler has lived in Cape Coral for over 35 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Cape Coral to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, and Cape Coral Kiwanis. He has been married to his wife, Mary, for 22 years, and they have four children. He earned his board certification in Real Estate Law from the Florida Bar, and primarily practices in real estate law and wills and trusts. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator. He can be reached at eric@capecoralattorney.com, or 239-542-4733.

This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.