Buying a House then selling it...Taxes????

Question

If you buy a house and sell it after (for example)3 years and you made money do you have to pay taxes out of that????

Answer 1

Did you live in it 2 out of the past 5 years? If so, $250000 in gains are tax-free if you are single, and $500k in gains are tax-free if married and jointly owned/occupied.

Otherwise, unless you do a 1031 tax-free exchange (which generally only defers taxes) into other property, you will pay long-term capital gains tax on the gains. However, if you kept good records, many expenses can often be deducted from what would appear to be the obvious gain.

Answer 2

This can vary by state I've been told, I know that in my state if you have lived in the house for at least 2 of the last 5 years, you do not pay capital gains taxes - up to $250k for a single and $500k for a couple. This is also what I have heard is most common as well.

Answer 3

I think if you've lived in the house 2 and a half out of the previous 5 years, you don't have to pay capital gains tax.

Answer 4

If you are not considered a dealer by IRS there is no ordinary income taxes, after 1 year it's long term capital gains on the profits taxed at 15%

Answer 5

You may have to pay a real estate transfer tax (NJ is high). If its your primary residence, then you can roll over the gains into the new house without paying taxes.

Answer 6

it fairly is totally common for human beings basically to stay in a house for decrease than 5 yrs. it rather is fairly how palms and pastime basically mortgages becamse regularly occurring through fact human beings basically deliberate on residing in a sources for some years and merchandising, so why not pay an particularly low quantity if the valuables value became nonetheless predicted to boost for the time of that element. needless to say this has resulted badly now.

Answer 7

That really depends on whether you can prove it is your only residence?

Answer 8

Taxes suck.