We just sold our home, which has appreciated about $775,000 over the seven years we've owned it. (We'll be moving to a lower-cost-of-living city.) After the $500,000 exemption for couples filing jointly, we'll still owe quite a bit in capital gains. I'm certainly not complaining, but are there any strategies for minimizing this? Here's what we have in mind:
-Deduct closing costs and real estate commissions.
-Deduct a few minor improvements we did over the years.
-Add back the amount we deducted for home office in past years.
We have flexibility in how much we need to work/earn in 2018 so we could reduce our ordinary income, but as I understand it, the capital gains tax rate is determined by your ordinary income plus capital gains, which this year will be very high.
Are we missing anything? Thanks for any insights.