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Surging Tax in the Booming Housing Market

webadmin • May 16, 2024

Surging Tax in the Booming Housing Market 

Selling a home today is more profitable than ever before. However, with this increased profitability comes a significant downside: a larger number of Americans are facing unexpectedly hefty capital-gains taxes. According to recent data from CoreLogic , a real-estate data firm, approximately 8% of home sales in 2023 resulted in gains exceeding the $500,000 tax-free exemption ($250,000 for those filing individually), more than double the percentage from 2019.


Understanding the Capital-Gains Tax Since 1997, individuals and couples selling their primary residence have been able to exclude up to $250,000 and $500,000, respectively, from capital gains taxes. This exemption threshold has not changed for over two decades, despite substantial growth in property values, especially during the post-pandemic real estate boom. The static nature of this exemption, combined with soaring home prices, means more homeowners than ever are finding themselves liable for capital-gains taxes once they sell their homes.
The Impact of Inflation One of the critical issues with the current capital-gains tax exemption is that it isn’t indexed for inflation. This oversight means that as home prices increase over the years, homeowners are pushed over the exemption limit by normal market appreciation, which isn't necessarily reflective of real wealth gain since inflation has greatly devalued the purchasing power of the U.S. dollar.
If you are considering selling your home, it’s crucial to understand the potential tax implications. The windfall from your home sale could lead to a significant tax bill if your profits exceed the exemption limits.
Implementing an Equity Transition Plan We recommend creating an Equity Transition Plan to ensure you are fully thinking through the downstream effects of selling your home. This strategic approach focuses on optimizing your financial outcomes by minimizing taxes and ensuring your next home purchase aligns with your long-term financial goals. Here's how it can help:
1. Tax Minimization: By understanding the nuances of the tax implications of your home sale, you can plan your selling timeline and home improvements to maximize your tax-free earnings.   2. Smart Reinvestment: Reinvesting the proceeds from your home sale requires careful planning to avoid financial pitfalls. An Equity Transition Plan helps you assess the best ways to reinvest in real estate or other stable investments.   3. Future Planning: Whether you're upsizing, downsizing, or changing locations, your next home purchase should support your lifestyle and financial goals. We can assess how to achieve this within the framework of your overall financial plan.
Selling your home is a major decision with significant financial implications. Don't navigate this complex process alone. Contact us today to develop your personalized Equity Transition Plan. Together, we'll ensure that you minimize your tax liability and align your home sale with your broader financial objectives, making your success not only more likely but also easier and faster to achieve.

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Luminate Bank® Welcomes Josh Eifert as Chief Financial Officer, Honoring Legacy of Dave Turk [Minneapolis, Minn.] – [2/4/2025] – Luminate Bank® is proud to announce the appointment of Josh Eifert as its new Chief Financial Officer, succeeding Dave Turk, who has played a pivotal role in shaping the company's strong financial foundation. Josh brings a wealth of experience and strategic vision to Luminate Bank, with 26 years in the banking industry. Most recently, Josh served as CFO at Tradition Capital Bank in Edina, Minnesota, where he led the financial strategy during its remarkable growth from $300 million to more than $2.5 billion in total assets. Before his tenure as CFO, Josh contributed to Tradition Capital Bank in other key financial roles. He began his career with Norwest and Wells Fargo Banks, gaining extensive expertise in financial and operational capacities. Luminate Bank's leadership transition reflects the company's thoughtful succession planning, ensuring its financial strategies remain robust and forward focused. Under the leadership of Dave Turk, Luminate Bank has built an exceptional financial infrastructure, delivering consistent results and creating a foundation that positions the company for continued success. Luminate Bank's CEO, Marc Campbell, shared his confidence in the appointment: "Josh not only brings exceptional financial acumen and strategic insight to Luminate Bank, but he also embodies the principles that define our organization: integrity, innovation, and a steadfast commitment to excellence," Luminate Bank's CEO, Marc Campbell, shared with confidence. "His leadership will ensure our financial strategies succeed and inspire confidence across all who depend on us." "I am honored to join Luminate Bank at such an exciting time. The company's remarkable history of financial excellence and its forward-thinking approach align perfectly with my values and vision," stated Josh Eifert. "I look forward to collaborating with the talented leadership team to build on this strong foundation and drive continued success for our customers, employees, and stakeholders." Josh graduated from the University of Minnesota with a degree in finance and completed the Graduate School of Banking at Colorado. CEO Marc Campbell expressed gratitude for retiring CFO Dave Turk's contributions, saying, "Dave has been instrumental in positioning Luminate as a financial leader. His dedication, insight, and stewardship will always be a part of our company's legacy." Josh Eifert will officially assume his role on February 18, 2025. About Luminate Bank® At Luminate Bank, We Open Doors—empowering individuals and families to achieve their financial dreams through personalized service and innovative digital solutions. As a nationwide bank headquartered in Minneapolis, Minnesota, we are committed to helping our clients meet their financial goals with a blend of modern technology, traditional values, and the trusted guidance of experienced professionals. Known for our exceptional commitment to customers, we take pride in delivering a seamless, supportive experience for every step of the journey. Our dedicated mortgage division has branches and a team of loan originators across the US, making expert home financing solutions accessible to communities nationwide. Luminate Bank is committed to safeguarding your money and accounts with FDIC insurance coverage up to applicable limits. Learn more about how we can open doors for you at www.luminate.bank , follow us on Instagram, LinkedIn, and Facebook, or call (952) 939-7200. For media inquiries, please contact: Debbie Schwake, CMO debbie.schwake@luminate.bank
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