Goodspeed: What to look for when buying a condo

LINDA GOODSPEED
CORRESPONDENT

QUESTION: What happens if I sell my primary residence to help pay my medical expenses? Will I have to pay capital gains taxes if the gain is less than $500,000?

ANSWER: Your decision to sell your primary residence to pay for your medical expenses should not change what you owe the federal government in taxes provided you meet the requirement that you lived in the property as your primary residence for two out of the last five years. If this is the case and you are married, you can exclude up to $500,000 in gain from taxes, $250,000 if you are single. In addition to federal taxes that you may or may not owe, there may be state taxes owed depending on the size of your estate or the amount of profit from the sale.

Regarding your medical expenses: The IRS allows you to deduct medical expenses when those expenses exceed 7.5 percent of your adjusted gross income. Keep in mind that you currently get a standard deduction of $12,550 if you are single, $25,100 if married, and $18,880 if you are head of household

QUESTION:My husband and I want to downsize from our 3,500-square-foot home in the suburbs into a condominium in the city. Neither of us have ever lived in a condo and are a little concerned about community living and what we might be getting into. What are some questions we should ask to make sure we don’t get into a bad situation?

ANSWER: Like most things, there are pros and cons to condo living.

On the plus side, the board of directors handles the maintenance and repair and replacement of common elements, which is quite different from single-family living where you are solely responsible for the upkeep of the home, including all repairs, lawn maintenance, plowing, garbage, painting, etc., etc.

In addition, costs for maintenance services are shared by the entire community. However, as you noted, prospective buyers should ask some key questions. These include financial questions about the association’s budget and anticipated capital expenses for the current and next two years.

Additionally, you should ask for several years of board minutes and review them to determine what particular issues and/or problems within the association the board has been discussing.

Linda Goodspeed is a longtime real estate writer and author of “In and out of Darkness.” Email her at: lrgoodspeed@comcast.net.