I sold a house in 8/2003 with large profit and has been unemployeed/student until now. I didn't report the profit in 2003 and bought a house 8/2005 with that profit. I'll start work next month and like to report taxes but afraid I may be taxed on previous income. And I don't have receipts of remodeling costs, they're lost during move.
2006-09-08 06:39:23 · 10 answers · asked by curious 1 in Business & Finance ➔ Taxes ➔ United States
If this house was your personal residence for 2 of the last 5 years, if you owned the house 2 years, there is no tax to pay unless the gain is greater than $250,000 for a single and $500,000 for a married couple. File your return for 2003 if you haven't, or amend the return if you have. If you have your return done by a preparer, they will exempt the income, If you use a tax program it will exempt the income. There is no tax due on a house used entirely as your personal residence if you owned it at least 2 years. Less time is prorated.
2006-09-08 12:14:41 · answer #1 · answered by irongrama 6 · 0⤊ 0⤋
You really should have reported the sale on 2003 tax which should have been filed in 2004. If you had lived in the house for at least 2 years out of the 5 years immediately preceding the sale, you are exempt up to to $250,000 ($500,000 married filing jointly). If the sales price was more than $250,000 (or $500,000) than the purchase price, you need to start gathering the expense receipt, etc. Remember, sales commission to the brokers, loan cost (including closing cost and points, etc. when you bought the house) and any other cost buying and selling the house are legitimate expense. Refer to your closing statement. It should be all in there. If you still need more receipt, look into your credit card statement (from the past) and see if you can recognize any house expense items on the statement. If you have used somebody to remodel, contact the person and see if they can send you something stating you paid them. Good luck.
2006-09-08 06:49:43 · answer #2 · answered by spot 5 · 1⤊ 0⤋
There are several issues that go into your question. Was this your primary residence for two of the last five years before you sold it? Are you married and, if so, were you both owners? Was the profit over $250,000 or $500,000 if jointly held?
The purchase of a new house has no bearing on the tax issue nor do the remodeling costs.
I suggest that you go to irs.gov to investigate the sale of your house situation and then see a tax expert.
2006-09-08 06:50:44 · answer #3 · answered by kearneyconsulting 6 · 0⤊ 0⤋
Visit an Accountant. You really should have filed in 2003 to report the capital gain, even if you were a student (at that time the receipts and documentation would ahve been helpful).
2006-09-08 06:51:24 · answer #4 · answered by Sean N 1 · 0⤊ 0⤋
Best to come clean now....Because the "Let them find it if they can" attitude will probably end up costing you many MANY thousands more in the future then if you square it up now.
Suck it up and do the right thing....Or be sorry later.
Talk to a Real Estate lawyer or tax preparer for the specifics of what happens if you take care of it now versus 10 years from now.
Those that tell you to ignore it wont be the dummies stuck shelling out the cash when you get caught....That'll be you!
2006-09-08 06:48:57 · answer #5 · answered by joe b 3 · 0⤊ 0⤋
Initiative and a plan could be a good initiate. besides the indisputable fact that, no longer something is had to start a rehabbing enterprise. faster or later, you're able to desire to to establish a criminal entity (LLC, LP, S Corp, etc.), yet those issues are no longer required, merely mentioned. Licensing and enable standards relies upon on what sort of paintings you're doing and the policies in that municipality. a good contractor will comprehend what facilitates are mandatory, and probability is, in case you haven't any longer have been given them, you will discover out while an inspector comes knocking...
2016-09-30 11:38:17 · answer #6 · answered by alisha 4 · 0⤊ 0⤋
Under the current law if the sold house was your residence for at least two out of five years preceeding to the sale, 250k/500k for single/married of that gain is not taxable. Check wat was the new law enactment day. It is around 2002/2003. Under the old law, buying the new residence did metter, but I think you had to do it within a year.
2006-09-08 10:54:50 · answer #7 · answered by Tanya E 2 · 0⤊ 0⤋
YES...CAPITOL GAINES TAX IS PAID ON THE DIFFERENCE BETWEEN WHAT YOU PAID ORIGINALLY AND THE PROFIT AT THE SALE DATE....BUT.....YOU CAN PHOTO COPY YOUR HOME IMPROVEMENT COSTS WHEN FILING AT THE END OF THE YEAR TO INCLUDE THESE COSTS WITH YOU ORIGNAL COST TO REDUCE THE SUM THAT YOU WILL HAVE TO PAY CAP. TAX ON.....UNLESS YOUR PURCHASE WAS WITHIN THE TWO YEAR PERIPD FROM SETTLEMENT TO SETTLEMENT OR YOU WERE OVER THE AGE OF 55... TRY TO GET RECEIPTS AS NEARLY AS POSSIBLE SO THAT YOU CAN VALIDATE HOME IMPROVEMENTS
2006-09-08 06:45:53 · answer #8 · answered by flowerspirit2000 6 · 0⤊ 0⤋
you dont have to. Let them find it out if they can.
2006-09-08 06:42:59 · answer #9 · answered by x_squared 4 · 0⤊ 0⤋
SPOT NAILED IT.
2006-09-08 08:55:47 · answer #10 · answered by Anonymous · 0⤊ 0⤋