2006-12-28 08:51:51 · 9 answers · asked by CLR 1 in Business & Finance ➔ Renting & Real Estate
We bought a house in March 2006 and since then my father has decided to sell his house to us. I was told that if you sell your house after owning if for less than two years you have to pay a fine or fee or extra taxes of some sort. I wish my father had decided this before we bought our house, but we really have been wanting this to happen. Anyone ever heard of this fine, fee or whatever?
2006-12-28 08:57:52 · update #1
When you buy a house, you pay X for it. If you sell it and get X plus, you have what is called a gain. That gain is taxable unless you roll the house over to a new one within a certainly period of time.
Generally you have to own and live in your principal residence for at least two years to qualify for an exemption.
2006-12-28 08:59:01 · answer #1 · answered by united9198 7 · 2⤊ 0⤋
This is a question for your lender. There are so many loan programs out there that you have to look specifically into your loan terms.
Also if you used any assitance programs to get into your home they may have a minimum number of years you must occupy the property. These are called forgivable second lien's, which means they do not make you pay them back if you fulfull their terms e.g. live there for 5 years, etc.
If your lender doesn't have a stipulation then you need to check out the homes in your neighborhood that have recently sold, these are called comparables. They need to be within in 500 square feet of your home and have closed within the last 6 months. If you are considering selling a realtor can help you with this, although some may charge a fee so be sure to ask.
Good luck!
2006-12-28 09:00:49 · answer #2 · answered by msfeliz777 2 · 0⤊ 2⤋
It's not a fine or a fee unless he has a prepayment penalty in his mortgage ... but what your dad will get hit with is the capital gains tax if he makes money on the sale.
Your dad needs to consult with a good accountant before he does this.
2006-12-28 14:57:49 · answer #3 · answered by BoomChikkaBoom 6 · 0⤊ 0⤋
No fee, no fine. You must claim any gains as income on your tax return. if you live in it, for 2 out of the last 5 years you don't have to pay taxes on any gains you made.
2006-12-28 09:13:50 · answer #4 · answered by Anonymous · 0⤊ 0⤋
There is no fee (aside from the regular transfer costs and realtor commissions) however any gains you earn from the sale are taxed as regular income.
After 2 years have passed any gains are treated as capital gains so you will be taxed much less if at all.
2006-12-28 08:58:26 · answer #5 · answered by David B 2 · 0⤊ 0⤋
Depends on what state you live in. In SC if the date on your closing papers and date you sell your house in not at least 2 years, then you will be paying Capital Gains taxes.
There are a few exceptions such as hardship, divorce, death or you are forced to accept a lower paying job, your job relocates you. All from which must have documentation to back your case up.
Hope this helps...
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2006-12-28 08:58:10 · answer #6 · answered by Anonymous · 1⤊ 1⤋
Probably not unless you went through a bond program to purchase your house. The only thing is you might not make any money selling your house since you have not been in it that long.
2006-12-28 09:02:48 · answer #7 · answered by GeminiGirl 4 · 0⤊ 2⤋
Well I think that depends if you used bond money to purchase the home and how much of a profit you would make from selling it
2006-12-28 08:56:18 · answer #8 · answered by khrissy 3 · 0⤊ 1⤋
Only if there is a prepay penalty attached to your loan.
2006-12-28 08:57:17 · answer #9 · answered by staceydian 2 · 0⤊ 3⤋