I want to sell my home in CA. I have only had it 13 months. I will only make less than $20,000. Will I have to pay capital gains if I dont reinvest?
2006-07-21 13:12:39 · 6 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
Here are the rules for capital gains tax on real estate:
1. You pay no captital gains if the property was you're primary residence and you lived in the property for 2 out the the last 5 years.
2. You pay no capital gains if the gain does not exceed $250,000 if single or $500,000 if married.
The property would have to be your primary residence for another 11 months for there to be no capital gains tax. If you sell now your long-term capital gains tax on $20,000 is 15% or $3,000.
2006-07-21 16:02:30 · answer #1 · answered by Superman P 2 · 0⤊ 0⤋
Hi- I don't know how you figured the gain of $20,000- just some things to consider-- any upgrades, real estate commission on the sale, closing costs( repairs, home warranty etc) If you have calculated it correctly unless you have what the IRS calls a life changing event ( Job loss, job transfer, divorce, adoption, and others please check) you will need to pay a proportion of the gain on $20,000 which would not be the case if you owned the house for 24 months- then you would be able to take up to $250,000 gain tax free- can't read between the lines but there are lots of options but the tax on that amount is not huge- email is you have more questions--karen
2006-07-21 13:25:42 · answer #2 · answered by Karen F 1 · 0⤊ 0⤋
There are a few more things to consider than just your cap. gains.
Are you going to buy another home ? You could roll your 'Equity' into that new home...
Would you qualify to do an interest only mortgage, then rent this CA home out? You could refinance the CA home & in the process take some cash out for a second home that you'll buy. Take some additional tax cuts by owning 2 homes.... (maybe)
Just some additional thoughts that you may not have concidered... and if you'd like, I'm in CA... allow me to work on your loan, I've done these transactions before, and you won't beat my prices or loans !
Antal
Surefast Mortgage
AToth@surefastmortgage.com
2006-07-22 05:29:33 · answer #3 · answered by Antal T 2 · 0⤊ 0⤋
Why would you want to sell in CA right now? I would hold on cause its not a sellers market, I would rent it out to at least cover your mortgage and taxes, this is the time for professional investors, Think of the long term benefits. I say HOLD.
2006-07-21 13:18:00 · answer #4 · answered by admyr75 3 · 0⤊ 0⤋
You never have to pay capital gains on a primary residence.
2006-07-21 13:17:02 · answer #5 · answered by phoephus 4 · 0⤊ 0⤋
Superman P is right.
2006-07-21 20:40:55 · answer #6 · answered by Ren 3 · 0⤊ 0⤋