As the size of a family increases, families traditionally seek to replace the home they are outgrowing with a larger one. As time goes by and parents become empty nesters it is not uncommon for thoughts to turn to downsizing or perhaps becoming snowbirds and moving to a warmer climate.
These, as well as other life changing events, such as relocation caused by the loss of a job or a promotion, divorce, the death of a spouse, the remarriage of a widow or widower, and the obligation of a family to settle the affairs of a parent who has been confined to a nursing home, all precipitate the need to sell the family home.
The sale of the family home often results in the realization of a substantial gain. For many it is the single largest economic gain of a lifetime and should raise questions about the tax consequences.