I want to sell my condo but I hear that there is a penalty for selling less than 2 years after purchase?

Question

Can anyone give me details, or where I would go to look up the correct answer?

Answer 1

Capital Gains. If you own a home and it is your personal residence for at least two years you can exclude up to $250,000 of gains tax free, $500,000 for a married couple.
If you did not own the home for at least two years, you will be subject at tax time to capital gains for the amount you gained, i.e, the difference between what you paid and what you sold it for. That is because when you close on the sale, the title company will report the sale to the IRS. You can, however, write off any improvements against that gain... so save your receipts!

Answer 2

You aren't penalized precisely for selling at less than 2 years, but you might not benefit either. Your condo may have risen in value since you purchased it. If this is the case, that is good news. However, here's the catch. You will be subject to capital gains taxes on the increased price you receive upon the sale of the home because you haven't lived there a minimum of 24 months out of the previous 60 months. That's the fun IRS at your service. If you had lived there at least twenty-four months, then you could be eligible to protect up to 250,000 in capital gains from the tax. If you are really concerned about the tax benefit, then stay for the full 24 months, otherwise, do not worry overly much about the sale. You can consult a tax professional if you have further questions on the taxes due on the sale of your house.

Answer 3

It looks like you are refering to capital gains tax. As previous post mentioned if you sell before you have lived there for 24 months you may be subject to pay tax on any increase in value from when you purchased the home. There are however ways to get around this tax. Such as moving for employment, it has to be a certain distance to your work, or if you are forced to sale due to finacial hardship. As always get advice from a CPA, tax attorney or other qualified individual.

Go the the IRS webiste and in their search bar type in capital gains tax. It will provide you with the info you are looking for.

And if you are reffering to prepayment penalties on your mortgage there really is no way out of that, you owe the lender a penalty(fee) for paying off your mortgage early.

Answer 4

Yikes another tax question; today has been tax day. Here you go from our research department
IRS: Real & Personal Property Sales: http://www.ustreas.gov/auctions/irs/
Home Sale Exclusion rules, publication: http://www.irs.gov/newsroom/article/0,,id=105042,00.html
IRS: Gain and losses on real property:
http://www.irs.gov/publications/p544/ch01.html
then after you get finished paying all those taxes you might want to take what's left over and move out of the country you can check all the countries out here:
CIA: Information on foreign countries: World Fact Book: https://www.cia.gov/cia/publications/factbook/index.html
lol
Buena Suerte

Answer 5

Talk to an accountant, but typically you have some exemption from taxes on a principal residence sale when you own it for 2 or more years.

Answer 6

yep, if you hold it for less than 2 years, it's a capital gain and you pay tax on anything you seel it for over the purchase price, minus the cost of any improvements.

Ex: paid $150,000 in 2005
sold $200,000 in 2006

gain of $50,000.

But if you made improvements (paint, remodel, addition, electrical upgrade) that cost is deducted from your gain.

ex: gain of $50,000
imprv. -$10,000

total taxable gain = $40,000

Answer 7

If it's your primary residence and you sell before you've lived in it for 24 months, you may owe capital gains taxes.

Answer 8

My husband says he's never heard of that. He used to be a realtor. He said since you live in a condo, they have separate community rules that have to be followed, so check your homeowners rules.

Answer 9

you could declare that as a capital loss on your taxes. and it will make a distinction on your very last numbers, yet you somewhat ought to contact an accountant in case you do not understand how a lot about taxes.

Answer 10

I don't think so unless it is in your condo agreement somewhere and you are aware of it. Talk to a lawyer and he/she will go over your deed info and rights of your association.