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Big home sales, big tax savings

By selling their luxury homes before the end of 2012, these wealthy homeowners avoided two tax increases on Jan. 1 and a huge payout to the IRS.

Chevy Chase, Md.

gallery high end homes oxford
  • Sold for: $2.6 million
  • Estimated tax savings: $110,000

In this posh suburb of Washington D.C., the sellers of this eight-bedroom brick Georgian were hoping to unload their home before Jan. 1.

The house had gained $1.8 million in value since it was last sold in 2005, some of which was courtesy of a few hundred thousand dollars of work the sellers put into it. With the impending Medicare surtax on investment income and the potential hike in capital gains rate to 20% from 15%, the owners were facing a huge tax bill if they sold after Jan. 1.

Luckily, they managed to close a deal in November, resulting in a tax bill that was about $110,000 cheaper than what they would have had to pay if they had sold this year.

- Last updated January 16 2013 05:16 AM ET

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