I sold my 1 year old house 2 years ago. How long can I delay for tax and how much I expect to pay for tax.?

Answer 1

If you sold your home two years ago (2005?) normally you would report it in the year sold. Any profit-- in other words, any amount that you received that was more than you paid for the house (plus improvements and selling costs)-- would be taxed at not more than 15% (long term capital gain rate) if you had it a year or more, or at your regular tax rate if you had it less than a year.

There are exceptions. If it was your primary residence and you lived in it and owned it for at least two years, you can exclude $250,000 of gain (profit) from the sale if you are single and $500,000 if you are married. That means if your gain was less than $250,000 (or $500,000 if married), you pay no tax at all, ever. If it was more, you pay tax only on the amount that exceeds the exclusion. It's a great deal for homeowners.

Under certain circumstances you can take a pro-rated exclusion if you lived there less than two years. Ask your accountant about this.

Also under certain circumstances, you can sell property using a "1031 exchange," which means you use the proceeds to buy another property and you defer taxes until the second property is sold. Theoretically you can defer taxes inevitably by continuing to do 1031 exchanges each time you sell.

The rules on 1031 exchanges are complicated, and you MUST declare a 1031 exchange before the property is sold. Consult your accountant and/or realtor for more details.

Unless one of these exceptions applies, you would have to pay taxes by the (un-extended) due date for the tax return. For 2005, that would have been April 15, 2006.

Answer 2

You can't delay the tax. If you sold it 2 years ago, you're already late on paying the tax!

Quickly file an amended return for the year that you sold the home (I'm guessing 2005 from your question) and pay the taxes due. You'll have penalties and interest for late payment of the tax so you need to move on this quickly to stop them from piling up!

The amount of tax will depend upon exactly how long you owned the house. Since you didn't own it for at least 2 years, all of the gain is taxable. If you owned it for one year or less, the gain is taxed at your marginal rate. If you owned it for over one year it's taxed at the lower long-term capital gains rate, normally 15%.

Answer 3

The requirement for an income tax exclusion for a personal residence is that you must have occupied that house for at least two years before you sold it.

It sounds here that you lived in it for only one year, before selling it.

All you have is a short-term gain on a personal residence, subject to your marginal rate of tax in the year you sold it. You have no exclusion available,
nor are you entitled to claim long-term gain tax treatment (15%).

The only delay of payment of tax would have been by October 15th of the year following the sale assuming of course if you filed an extension by April 15th.

However, an extension to file is not an extension to pay. You will pay tax on the ordinary gain on the sale of the house, plus penalties and interest for late filing and late payment.

Whomever suggested you to do this, should be hanged.

Best Wishes.

Answer 4

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Answer 5

you would report the sale of your house for the tax year you sold it in. if you sold it in 2005 you'd show that sale on your 2005 tax return.