If I invest the money back into another house what type of taxes will I have to pay? Capitol Gains? Thanks!
2006-08-02 06:16:59 · 7 answers · asked by dan c 1 in Business & Finance ➔ Renting & Real Estate
15% capital gain if held over 1 year, your regular tax rate if less
2006-08-02 06:20:16 · answer #1 · answered by Anonymous · 0⤊ 0⤋
So many answers, I bet you are pretty confused?? Also many people here are confusing the capital gains tax exemption with the tax deferred rule (1031)
Here is a simple answer to your question: (This message is NOT intended to be any type of TAX ADVICE)
If you have held your property as your primary residence for at least 2 years within the last 5 years, then you are exempt from paying taxes up to $500,000 (married) or $250,000 (single).
If you do live in this property less than 2 years than you will have to pay capital gains taxes over the profit you made selling your home regardless if you re-invest it into another home (primary residence)
If you really want to clear up this issue a little bit better, visit my blog and read the recent article I posted titled "If you sell, you pay Uncle Sam! Or do you??"
Enjoy the reading & good luck.
2006-08-02 14:45:05 · answer #2 · answered by SCCRealEstateUNCENSORED.com 3 · 0⤊ 0⤋
unless you bought a house in an area that has boomed over night, i really do not see you making much of a capital gain after 2 yrs. u will probably have to pay taxes on the new house and well as the old house and it may not be considered a good tax break. consult an accountant.
2006-08-02 13:21:57 · answer #3 · answered by lasalle_1986 4 · 0⤊ 0⤋
You're gonna get killed. The "invest back in another house" thing isn't the rule anymore. It's $250,000.00 per person for a primary residence owned for more than two years. Anything else and you will pay capital gains tax on the increase in value.
2006-08-02 13:21:14 · answer #4 · answered by Loss Leader 5 · 0⤊ 0⤋
Depending on which state you live in.. in California you have about two years .. i think.. to invest into another property without paying any capitol gains.
2006-08-02 13:20:24 · answer #5 · answered by CrYsTaLiTe627 2 · 0⤊ 0⤋
Capital gains will not apply if you buy another house that is of equal value or higher.
If you bought the house for 200,000 and sell it for 220,000, you must buy a house for at least 220,000 to avoid tax.
If less than that you will have to pay tax n the difference. If the new house is 205,000, than you pay tax on 15,000.
BP
2006-08-02 13:22:45 · answer #6 · answered by billyandgaby 7 · 0⤊ 0⤋
if you are buying another house soon don't worry about capitol gains
2006-08-02 13:21:50 · answer #7 · answered by jaimestar64cross 6 · 0⤊ 0⤋