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When retirees opt to downsize, taxes are a critical consideration, especially if relocating to a new state. Adam Brewer, a tax attorney at AB Tax Law, joins Wealth host Brad Smith to explain the complexities retirees face when weighing how to when to downsize or whether it's worth to buy a new home or just rent. "If you're a retiree looking to downsize, don't take the tax side of things lightly. It’s a complex mix because we're talking about income tax, we're talking about retirement, we're talking about property tax and we're also looking at inheritance tax," Brewer says. Brewer points out that the Tax Cuts and Jobs Act has accelerated the shift from high-tax states like New York to lower-tax states like Florida. This is mainly due to the law's limit on state and local tax deductions to $10,000. Additionally, Brewer touches on the potential pitfalls of selling a home to family members, warning, "If you sell it to your kids, you have to be careful about what is the fair market value of the home if you sell it. If you gift it... the lifetime gift exemption is so high... most taxpayers aren't going to run into that. But what their heirs may run into is if they ever decide to sell the property, now they could possibly get hit with a massive capital gains [tax]." To watch more expert insights and analysis on the latest market action, check out more Wealth here. This post was written by Josh Lynch