For those of you who live on Chicago’s North Shore, one of the reasons you may have been drawn to it is because of the gorgeous, expansive homes that are rich in character. There are a number of peaceful neighborhoods that are found along Lake Michigan’s shores that appear to be right out of magazine, and many buyers are able to find the exact home for which they’ve been searching.
And, while these oftentimes historic homes are stunning, you may be considering downsizing this year. Whether you’ve become an empty nester, are looking for a place that doesn’t require as much upkeep, or you’re looking to settle into a North Shore home that’s a little more cozy; downsizing can be just the thing!
In fact, Evanston is a great place to find a charming bungalow or even a renovated condo in the midst of Evanston’s downtown. These homes still have that unique character that allows you to feel you’re still investing in a piece of history without the additional expenses a larger home can bring.
As Evanston Real Estate agents, we always want to provide you with pertinent information that you can use throughout your experience in the Evanston Real Estate market and as you begin to settle in to the Evanston lifestyle. Recently, Forbes.com pointed out ten great tips for downsizing that you’ll want to take a few moments to review. We hope these tips are helpful to you as you consider downsizing in Evanston!
1. Accept that downsizing is tough- You’ll find when going through your things, there are some very personal items that will be hard to get rid of. Whether a set of furniture passed down in your family or a collection of dolls from your grandmother; you’ll have to be willing to let go of those items that may not fit in your new space.
2. Find trusted experts- If you’re planning on conducting a large house sale on most of your items; you’ll want to ask the experts. You can stop by a local antique store or do your own search online. Pricing your antiques and heirlooms correctly will keep you from being ripped off by those attend these type of sales in order to make money. These are personal items so make sure you know monetary value before selling.
3. Call in an appraiser- If you don’t have any idea of what you’ve got, consider paying an hourly fee to an appraiser of “household contents” or “decorative arts” who will visit your home. The appraiser should be disinterested, meaning they shouldn’t be bidding for your items or working on commission. This will help give you a better idea of what’s in your home.
4. Be wary of family lore- Just because grandma believed something was valuable doesn’t mean it is. On the other hand, family members may have something that they use daily and don’t recognize the value of. The rule of thumb is to figure out an items worth for yourself.
6. Call in an auction house- Auction houses will also send out specialists to review your household contents, and suggest items you might consign. While at an estate sale you have a limited audience and you set the price, at auction you can reach an international audience and the price can be bid up if you’re lucky. Some auction houses, however, will take lower-value items only with no reserve—meaning you must sell the item no matter how little is bid.
7. Donate and deduct- Bags of old clothes and rickety furniture you can be left out for the Salvation Army or Goodwill to pick up. But if you have something special to donate you might want to seek out a local charity that can use the item. Aside from the satisfaction of giving, you get a charitable deduction on your tax return—assuming you itemize.
8. Pass down heirlooms before you die- You can give away up to $13,000 a year to as many individuals as you’d like without eating into your lifetime exemption from federal gift tax. The $13,000 includes cash, stocks, or things: your jewelry, furniture, rare comic books, whatever. “You can give away a lot of stuff, keep it in the family, and there are no tax costs,” says Carol Harrington, an estate lawyer with McDermott, Will & Emery in Chicago. Once you go over the $13,000 per person, you must file a federal gift tax return. Filing a gift tax return may be worth it, if you’re passing on family treasures your children will use now and cherish. If, however, it’s not something your family wants; sell the item now and give them the money instead.
9. Watch out for capital gains- Most personal items bought at retail depreciate enormously. If you have jewelry listed on your insurance policy at replacement value, you could get as little as 30% at resale. The upside to depreciation: if you don’t have a gain, you don’t owe capital gains tax. If you hold onto something until you die, however, your beneficiaries get a step-up in basis—meaning its new basis is what it’s worth when you die. So if you have an item that has appreciated, or that you can’t show the basis of, you may want to hold it until your death. By contrast, if you give something to your daughter when you’re alive, she takes your cost basis. That’s fine if she’s going to keep handing it down generations. But if she sells it, she owes the capital gains tax on any appreciation since you bought it.
10. Remember the estate tax return- Under current law, on Schedule F of the Form 706 estate tax return, your executor has to list the value of your household goods (this includes jewelry, silverware, books, statuary, oriental rugs, and coin or stamp collections, etc...). Any item valued in excess of $3,000 or any collection valued in excess of $10,000 must be appraised and listed separately. Think there won’t be a need to file an estate tax return because your estate is less than the $5 million federal estate tax exemption? If you’re a surviving spouse counting on a provision known as “portability” where you can carry over part of your late spouse’s unused estate tax exemption, you need to file a return. Plus, the values for personal items reported on the estate tax return are typically used by beneficiaries to establish their cost basis.
Again, we hope these tips are useful as you think of starting a new chapter of life in a smaller home or condo in Evanston! If you are interested in seeing some of these charming homes that Evanston has to offer or have more questions about the current Evanston Real Estate market; please contact us!
As The Thomas Team of Evanston Real Estate agents, we look forward to helping you navigate through the home buying experience with ease!
The Thomas Team
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