2006-06-20 05:28:56 · 6 answers · asked by emilysmoma 3 in Business & Finance ➔ Taxes ➔ United States
Maybe not, depending on how much you sold it for. The law changed a few years back - until then, answer would have been yes.
Assuming you owned and lived in the home for at least two years out of the five years before you sold the house, and you didn't exclude gain from another house in the 2 years before the sale, you can exclude up to $250,000 of the gain. If you're married and file a joint return for the year of the sale, either you or your spouse owned the house for 2 years out of the 5 before the sale, both of you lived in the house for two of the five years before the sale, and neither of you excluded gain from another house within 2 years before the sale of this one, you can exclude $500,000 of the gain.
It doesn't matter anymore for tax purposes whether you invested the gain in another home.
2006-06-20 05:43:11 · answer #1 · answered by Judy 7 · 2⤊ 1⤋
The old tax rule that you could avoid paying capital gains on the sale of your home if you rolled the gain to a new home changed in 1997. That was more than 10 years ago. (Income averaging went away more than 20 years ago, but I still get asked about that too.) The $250/$500K exclusion is a MUCH better deal. If you do not qualify for the exclusion, the gain *is* taxable. See IRS publication 523. That publication *does* get updated every year. (I guess I'm annoyed that at least half the posts have said you can avoid the taxes by reinvesting the gain. NOT TRUE. This changed May 7th, 1997.)
2016-05-20 05:02:56 · answer #2 · answered by Anonymous · 0⤊ 0⤋
A capital gains tax, is a tax charged on capital gains, the profit realised on the sale of an asset that was purchased at a lower price. The most common capital gains are realised from the sale of stocks, bonds, precious metals and PROPERTY. Not all countries implement a capital gains tax.
2006-06-20 05:37:09 · answer #3 · answered by holykrikey 4 · 0⤊ 0⤋
You do not have to pay a capital gains tax if you live in the house. You can exclude up to $250,000 of the "profit" if you're single, $500,000 if you're married. You don't even have to buy a new home to qualify, you just have to have lived there for 2 years.
2006-06-20 15:23:05 · answer #4 · answered by Ren 3 · 0⤊ 0⤋
NO.NO.NO. The law changed may 7, 1997....No capital gains tax on proceeds from primary residence. You can downsize if you want with no repercussions. There are exceptions, most notably if you have owned and lived in the residence for less than two years you get no break.
2006-06-20 06:06:12 · answer #5 · answered by Paula M 5 · 0⤊ 0⤋
Yes, unless you put it into a 1031 exchange, and you can defer the tax on the remaining portion. Possibly use the extra $ for home improvements to lessen your tax liability.
2006-06-20 05:35:42 · answer #6 · answered by joemonty2000 3 · 0⤊ 0⤋