Recently I ran across a post by a favorite blogger of mine, Meredith of Like Merchant Ships. Although Meredith isn’t blogging any more and this post is several years old, I still found the content compelling.
Meredith wrote about how she and her husband use the tax laws to their advantage by buying houses that need lots of cosmetic work, and doing the improvements themselves while living in the house for at least two years. The two year number is significant because you aren’t taxed on the gain when you sell the house as long as it’s been your primary residence for at least two years.
The first time they did this they took the profits when they sold and used them to build up their savings account. Meredith points out that, because of the tax advantages, building savings in this way was an attractive alternative to her working outside the home.
I love it when people thing outside the box in this way. Check out Meredith’s post for more information and motivation.