If you own a home, which you rent, but into which you expect to move, please follow these steps.

  1. Enter the home (property A) as a property in the Real Estate area, specifying the sale of the property in the year you will be personally occupying it (i.e., pretend you will be selling the house.)
  2. Enter a change in home under Housing in the same year that you will be moving into property A.
  3. Enter the purchase price as equal to the same price you specified you would sell the home in step 1.
  4. Specify zero closing costs of buying property A.
  5. If you are going to maintain the mortgage on property A, specify a downpayment that will leave you with the same mortgage balance in the year you will "sell" real estate property A and "buy" the same home. For example, if you plan to move into your rental unit in 2030, which you think will be worth $1 million in today's dollars, and you'll have a $200,000 mortgage, measured in today's dollar in 2030, specify an 80 percent downpayment. How can you calculate the value, in today's dollars, of your mortgage balance on property A you'll have in 2030? Simple. Run your plan once assuming you don't sell the property and don't move into it. Consult the real estate report to see what mortgage you'd have outstanding in 2030. If it's $200,000 and the property will be worth $1 million when you sell it, retaining the $200,000 mortgage is the same as selling property A and rebuying it with an 80 percent downpayment.
  6. What about capital gains taxes? Run the program with the simultaneous "sale" and "purchase" and record your taxes. Run it again with the "sale" and "purchase." Determine the extra taxes you pay in 2030. Enter a non tax-related special receipt equal to this amount in 2030. This will offset the capital gains taxes the program will potentially assess in 2030.