There is no loss. There is only the money you get net after the sale.
Now, you can get into cash flow issues etc. But, with home interest being tax deductible and long term capital gains being below normal taxes your almost always better off over time to sell after a bubble than before.
PS: If your investment makes 4% and your mortgage is 5% then you have a net savings after taxes.
No, that's not true because the $500k cap gains exemption is per-transaction.
Reread what I said?
That's why 2 houses with 2 mill gains is better than 1 house with a 4 million gain.
Selling 1 house with a 4 million gain is one transaction with a 500k cap so you pay taxes on 3.5 million. But selling one house with a 2 million gain then another house with another 2 million gain is 2 transactions so you pay capital gains on 3 million and get an extra 500k tax free.
Remember, until you sell the second house it's value is meaningless but when do sell it's purchase price and value become important.
It is.
> yes it costs money but assuming you want to down size that should hardly be an issue.
Why? A loss is a loss. What difference does it make if it comes out of your checking account or your home equity?