Hey dad, are we moving again to avoid paying taxes?
Yep.
But isn't that illegal?
Nope. It's taking advantage of Section 121 of the U.S. tax code.
And is this just something you know about because you're super rich and privileged?
Nope. Anybody can take advantage of this. You just need to have lived in the house for two of the last five years.
And then when we sell it, we can exclude up to half a million dollars in capital gains.
Oh, so is that why we move every two years to a bigger house in a fancier neighborhood?
Yep. We haven't paid one dime of taxes on any of those capital gains in 20 years while we've been building our family's net worth.
Now how did you learn about this?
Just follow Social Cap. He makes complex finance seem easy.