when selling a house, do you pay taxes on the monies recieved from sale?

Question

we are purchasing this house from my husbands parents, they have lived there for 35 yrs. in Ontario, Canada

Answer 1

Only if you make a profit. If the money is put back into a house, then no.

Lets say you bought a house for $50,000 and sold it for $110,000. Then you made $60,000 and pay tax on that. HOWEVER, you need a place to live. If you buy another house for $110,000 or more, then the money is still in the house cost and no taxes are paid.

If you bought another house with the money from the first and paid $100,000...then your net earning from the sale was only $10,000 and you pay taxes on that.

You can deduct the money that you spent on the upgrade of the old house also. FOr instance, if you had spent $10,000 for a new addition, then that cost is deducted from your earnings...in the example above, where you made $10,000 on the sale, but spent $10,000 on a new room, then the net earning is zero again.

See the IRS tax rules for deductions on sale of property.,

Answer 2

When you sell a house, if you sell it for more than what you purchased it for, you have a gain on the sale of the house. You are subject to tax on the gain. If you have a loss, it is a nondeductible personal loss.

If you have owned AND used the home as your principal residence for at least 2 years out of the previous 5 years, counting back from the date of sale, then you can exclude the first $500,000 of gain from tax if you are filing married filing joint, $250,000 if you are filing single.

You can no longer roll the gain over into a replacement home. That option went away years ago.

Answer 3

If it's not your primary residence, then yes you do.

If it is your primary residence and you owned the house for at least two of the five years immediately prior to the sale, and lived in it for two of those same five years, then you can exclude up to $250,000 of gain ($500,000 if filing jointly) from your taxes, so if you made less than that, then you wouldn't have to pay taxes. You can take this exclusion as long as you haven't taken it within the previous two years.

If you moved because of a job change, but lived there less than two years, you might be able to pro-rate it and take part of the exclusion.

Answer 4

In the USA, if this home was your primary residence for 2 of the past 5 years, the gains are exempt from income tax for up to $250,000 in profit. That's $500,000 for a married couple.

If it wasn't your primary residence, then the profit would be taxed at the lower capital gain rate if owned over 1 year.

Answer 5

you surely would not be charged uk earnings tax because it isn't earnings. you would not be charged cgt both in case you qualify as ex-pat. even if you probably did not you would possibly want to be entitled to double taxation alleviation, ie you would possibly want to deduct the spanish tax out of your uk tax bill. Get this cleared with the tax place of work earlier you do the transaction. playstation move money right into a Euro Account else the commercial company will clobber you with undesirable change charges. Then get as many prices as accessible to change you money. Haggle demanding for this. ( i purely lose a million/4% on my transactions get as on the fringe of this as you could)

Answer 6

what percent of taxes do you pay on the profit of the sale of a house

Answer 7

Yes

Answer 8

I think it also has to do with how long you lived in the home.