2006-08-18 09:44:52 · 11 answers · asked by bcady98 1 in Business & Finance ➔ Renting & Real Estate
Your choices:
Flip it and pay what ever your regular tax rate is, 10% 15%, 28%, 33% etc.
Hold it for one yr and the tax rate is 15% as capital gains.
Hold it 2 yrs as your primary home and no tax is owed as long as the profit is under $250K for single people and $500K for married people. Here is a thought. Liv there for 2 yrs, buy another home, move and rent the first home. Live in home #2 2 yrs, sell home number one buy #3 and move there, rent #2. Live in #3 2 yrs sell #2 buy #4 and rent #3.
You can do that as many times as you like and avoid taxes as long as it was your primary home 2 of the last 5 yrs, and you sell it within the 5 yr window. There is no rolling over, no requirement to reinvest your primary home money to avoid taxes provided the gain was under the $500K cap.
Alternately you can buy a replacement real property (does not have to be another home, just has to be real estate for real estate and cost equal to, or more than the real property you sold) under the 1031 like kind exchange program. However if you receive any of the money from the sale that portion is taxed accordingly. There has to be an "intermediary" do the sale and buy for you (at a cost I'll add), you can not do it.
There are no free lunches my friend, there is a price for all you do.
2006-08-18 10:08:32 · answer #1 · answered by hithere2ya 5 · 0⤊ 0⤋
Considering costs of buying and selling you are likely to loose money on a short-term flip. In most cases you can deduct losses from your income.
2006-08-18 12:41:26 · answer #2 · answered by svikm 3 · 0⤊ 0⤋
Your cannot avoid capital gains taxes. However, you can defer taxes by doing a 1031 exchange. See the irs.gov site for particulars on the exchange.
2006-08-18 09:50:57 · answer #3 · answered by kearneyconsulting 6 · 0⤊ 1⤋
Keep the house for two years and avoid the taxes if it is your primary residence.If you really were a real estate investor youwould already know the answer to this question.You owe taxes pay them.As my daddy says live and learn.
2006-08-18 13:37:11 · answer #4 · answered by Anonymous · 0⤊ 1⤋
How about a contract for deed? Don't transfer title for at least a year...collect monthly payments during that time...then ballon payment Experts out there...will this work?
2006-08-18 13:03:54 · answer #5 · answered by just me 3 · 0⤊ 1⤋
You can't unless you live in or are "improving the home" for at least 2 years. Sorry
2006-08-18 09:52:08 · answer #6 · answered by Anonymous · 0⤊ 1⤋
Buy a similar property with the proceeds.
2006-08-18 09:50:18 · answer #7 · answered by Anonymous · 0⤊ 1⤋
1031 exchange. Only way you can to it.
2006-08-18 12:08:48 · answer #8 · answered by Karen R 3 · 0⤊ 0⤋
you can't. and THe IRS do not like your question like that. If you make money, do the right thing
2006-08-18 10:06:56 · answer #9 · answered by Hoa N 6 · 0⤊ 1⤋
Don't sell it at a profit. Or, don't sell it at all. Live in it or rent it out.
2006-08-18 09:50:52 · answer #10 · answered by regerugged 7 · 0⤊ 1⤋