2006-08-12 04:53:27 · 8 answers · asked by SONNY 1 in Politics & Government ➔ Law & Ethics
If the home has been your PRIMARY residence for at least two years, you don't pay tax on $250,000 of profit per resident owner. (the actual rule is that the home has to be your primary residence for two years of any five-year period you've owned the home, however if you've owned your home for three years, and if you've lived there for two of those three years, you should be fine).
There is not any rule which says that you have to reinvest or buy another home. It's yours free and clear-period.
2006-08-12 05:01:21 · answer #1 · answered by Hello Che 3 · 1⤊ 0⤋
Best bet is to check with a tax professional, such as a tax accountant or tax attorney. (I'm not one of them!)
Thanks to the Tax Payer Relief Act of 1997, there no longer is a one-time tax exemption for those over age 55 or when you buy a more expensive house...
Currently, you're allowed to take up to $250,000 in profit ($500,000 if you're married) when you sell a house. It has to be your principal residence, though (where you live, which you claim it is), and you have to live there for 2 out of the last 5 years. There's no limit to the number of times you can sell a house and take the exemption above. (If it was an investment property otherwise, then the usual capital gains tax applies.) (If less than 2 years, then you may be able to take a partial exclusion of the capital gains tax, if you don't fall into a special category such as a move because of a job relocation, health reasons, and certain other unforseen circumstances.)
So, for example, if you're single, if you purchased your house 3 years ago at $250,000, and you sell it today at $500,000, you made $250,000 in profit. That $250,000 in profit is exempt from the capital gains tax. But if you sold it for $500,001 you made $250,001 in profit, and that last $1 is taxable under capital gains.
So, depending on how much profit you make on the house, then you may have to pay capital gains tax.
2006-08-12 05:17:00 · answer #2 · answered by mrvadeboncoeur 7 · 0⤊ 0⤋
the vendor will pay ultimate costs on maximum genuine belongings transactions at the instant because of the industry. ultimate costs are in lots of cases 6% of the finished purchase cost so if somebody offered the dwelling house for a hundred and sixty,000 ultimate costs could be $9600 and you will possibly surely lose money and could pay out of pocket. to boot there is taxes levied by applying the state you reside in - as an occasion, in WA state there's a 2% excise tax on genuine belongings transactions so the actual proportion you will pay finished is 8%. there's no proportion assure of earnings on any genuine belongings transaction so i'm not sure how many you're bearing on on your question.
2016-11-04 10:40:54 · answer #3 · answered by Anonymous · 0⤊ 0⤋
If you lived there 2 out of the last 5 years and used it as your primary residence then you have a tax free gain up to 250k if you're single and 500k if your'e married.
If it was an investment property, then you should 1031 into a different property to roll your capital gains over.
2006-08-12 15:30:46 · answer #4 · answered by El_Nimo 3 · 0⤊ 0⤋
No, only if you made more than 250,00 in profit per person. So if you are married that would be 500,000 profit would be subject to capitol gains. If you made that much profit, I would't worry.
2006-08-12 04:58:17 · answer #5 · answered by Anonymous · 0⤊ 0⤋
No, it's called the Homestead Exemption. If it's your primary residence, then when you sell it, your profit of $250,000 is untaxed. If you are married, it is $500,000 that is untaxed.
2006-08-12 04:59:28 · answer #6 · answered by EddieMora 2 · 0⤊ 0⤋
Edward is right, but you really need to talk to your realtor, accountant and tax attorney.
2006-08-12 04:59:21 · answer #7 · answered by Anonymous · 0⤊ 0⤋
No tax, if you purchase a new home of equal or more value.
2006-08-12 04:57:33 · answer #8 · answered by ed 7 · 0⤊ 0⤋