I purchased a house for $134k on November 24 2004. I have refinanced and taken out equity loans on the house totalling $207k. I am selling my house for what I owe ($207K). Since it is under 2 years do I have to pay Capital Gains Tax? If so, will I still have to pay it if I wait until November 24th of this year to close? I have already purchased a new house and have been living in it for 6 months.
2006-10-23 04:45:41 · 2 answers · asked by ucfwoodsy 2 in Business & Finance ➔ Personal Finance
Not only do you have to have owned the property for at least two years but you must have used it as your main residence for two years as well. So you will have to pay tax on the gain. This will be at either 5% or 15%, depending on the tax rate on your ordinary income.
2006-10-23 05:43:56 · answer #1 · answered by skip 6 · 0⤊ 0⤋
Just wait to close until after November 24th and you should be fine.
Dont forget that you WILL pay excise tax (2% in my area) probably about 6% for realtor's fees, and about 1% in misc. closing costs. So you'll have to price over $207K by 9% just to break even.
2006-10-23 12:04:29 · answer #2 · answered by Anonymous · 0⤊ 0⤋