Quote:
Originally posted by turbo6bar
$500k (spouse & yourself) in profit is tax-free.
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This is probably true in your case, but to clarify the point...the tax codes are almost never quite that simple.
If you and your spouse:
1. file jointly,
2. the house was your primary residence,
3. you occupied the house as your primary residence for at least two of the last five years,
4. you did not depreciate any portion of the house for business use (like a home office),
Then the above is true, up to $500K in gain is tax free.
As far as the rest of your question goes, I'd live debt free and start an investment program for the money I would have spent on the mortgage. Others will tell you this is foolish, but I think being 100% debt free would be liberating (I have only a mortgage as personal debt, and aspire to be rid of it someday).