DH and I think it is near time to escape the Bay Area rat race and head east. (Not sure exactly where east. Could be as close as Tahoe, could be as far as Milwaukee.) We would like to sell our houses and buy a new place with cash.
Our main question is: how do we get around paying taxes on a home sale? More so, two home sales? I'm afraid I know little on this topic.
Do we have to buy a new house within XX months?
Obviously we only live in one house. Do we sell that one, move to the other house for a year, then sell that one?
Do we sell the cheap or expensive house first? (We live in the expensive house because it is closer to DH's job.)
How do we time it for DH quitting his job? We don't plan on having much income for about 2 years after he leaves his current job. Obviously we wouldn't sell both houses in December, the same month he quits his job, because then we'd be paying a lot of taxes? Should we sell the houses in years we have little income?
We aren't ready for a complete FIRE but we want to travel a lot now while the kids are little and my parents are still alive. We both enjoy our careers and would rather work while our kids are in school to get to complete FIRE. Having 2 little kids has taken quite a hit on our patience and quality of life (less time to cook, exercise, vacation) and we need a few years to re-establish a happy baseline. We will rent our new place while we travel, then move in when we're ready to re-enter the (hopefully less brutal) rat race.
The real estate market is up in the Bay Area and I'm not sure how much longer it will be high- I just know it is high now.
Thanks for your thoughtful input, it's appreciated.