I sold a house, what percentage do I have to pay to uncle sam for taxes, also i need to know how long do i hav

Question

a friend told me that I have 2 years to pay my taxes, he also told me that If i invest the money before 2 years, I dont have to pay taxes, can somebody help

Answer 1

If this was your residence, you don't ever have to pay taxes on it. That law does not exist anymore. If it was an investment property, You have to pay taxes. My dad is a CPA and I have flipped 7 houses, and I still have to pay.

Ask your CPA

Below me:
Dude-That law is GONE. What you are saying was the case up until a few years ago. I think that I would know. My dad has done this for 40+ yrs. & he has done my taxes since I was old enough to work. Go ask your CPA. Not H&R Block. Then I want an apology. JK

Answer 2

Your friend is wrong. If this is your primary residence and you held it for over 2 years, then you may exclude up to $250K in gain as a single person or $500K as married. There are no "rollover" provisions if you reinvest the money. That only applies to a 1031 tax deferred exchange of rental property. If that is your case, you would have needed to have done the 1031 exchange already if you sold the house already. The rate of tax you will pay is based on how long you held the house and what tax bracket you may be in as well as what state you live in.

Let me know if you need further info and contact me via: http://www.slarson.com/contact

Regards,

Steve

Answer 3

Your friend is incorrect. You have to pay taxes in the year that you sell. How much you have to pay is dependent upon how long you had your house and how much you made on it. If you lived there for 2 of the last 5 years, then you don't have to pay taxes on $250k of gains ($500k if you are married). Anything over that you pay at LTCG rates of 15%.

If you owned your house 1-2 years, you pay taxes at LTCG rates (15%) on the whole profit. If you owned less than a year you pay taxes at income tax rates.

Good luck!

Follow-up in response to some responses: You ALWAYS pay taxes, unless your profit is under the $250k (500k married) exemption amount. It doesn't matter if you take that profit and reinvest it in a new home, you have to pay taxes on it. And, taxes are due in that tax year. So, if you sell on 12/30/06, you have until 4/15/07 to pay the taxes on it.

OP, be very careful. You're getting some really bad advice.

Answer 4

At closing you paid 1% excise tax. Now all you owe is income tax on the gains-- IF it was not your primary residence OR you had it less than 2 years.

IF it was your house and you had it for some time, you dont pay income tax.

If you owe income tax, however, you need to file it on your next income tax returns (probably in 2007) and include the sale. You can then file for an extension to pay, if you owe more than you can handle.

You only pay on the 'profit'....after paying off your mortgage, title co, realtor, etc. Also if you have receipts from 'improvements' that contributed to the gain, hang onto those.

Answer 5

It all depends on how long you held the property as to the tax. Any profits will be taxed if not re-invested in new home under 2 years. Check with your tax preparer for absolutes

Answer 6

Usually the seller's agent gets 3% and the buyer's agent gets 3%. The seller of the home pays the commission to both agents. If the seller's agent finds their own buyer and there is no buyer's agent involved the seller's agent can make the whole 6%. This is called dual agency and is the best possible scenario for an agent. These commissions are negotiable but the standard is 3% on each side to be paid by the seller...

Answer 7

I would give you the links that the IRS has provided to the public but yahoo answers says that providing links with the proper answers to questions is spamming and they rather just have written answers from sources that are not qualified to provide such answers

Answer 8

well if you invest you will not have to pay your taxes but if you don't invest I think that you have at least 6 months