We purchased land in Dec 2006 and are in the process of building a new house on it. I was offered a better paying position with my current employer that would require me to move to another state. We have not physically lived on the property but it is our "primary residence" because we are renting the house we are living in now. Would the 2 years start from when we purchached the land or when we finish the house? Would we have to pay capital gains on the money we made if we took that gain and put it down on a new home in the state in which my new job was? Please help. Thanks
2007-04-10 06:59:16 · 4 answers · asked by Lynette H 1 in Business & Finance ➔ Taxes ➔ United States
Is there any tax deduction if I am selling and moving out of state for a better job?
2007-04-10 08:56:39 · update #1
It is NOT your primary residence since you don't live there. The house you are renting and living in is your primary residence. Renting rather than owning doesn't change that. So yes, you'll owe capital gains tax if you sell the lot at a profit. Using the money for a down payment on a house has no tax effect.
Sorry - I know that's not the answer you were hoping for. But I don't imagine you'll have a huge gain if you only own the lot for a few months - and if you do, well, you'll still have most of it left after paying the taxes.
2007-04-10 07:28:12 · answer #1 · answered by Judy 7 · 0⤊ 0⤋
you ought to pay Capital helpful homes no count number how lengthy you held the valuables if the earnings replaced into more effective than £9,2 hundred. The longer you carry an asset the added taper alleviation you ought to get which in turn ought to cut decrease back the quantity of earnings. EG promote asset before a million year - 100% of the earnings is chargeable carry asset for a million finished year - 50% of earnings is chargeable carry asset for 2 finished years or longer - 25% of earnings is chargeable. If this the above replaced into your residing residing house then there should be no CGT
2016-12-03 19:19:30 · answer #2 · answered by quartermon 4 · 0⤊ 0⤋
The 2 years (for purposes of the cap gains exclusion) start from when you begin living in it as your main home.
If you sell it before then you will owe cap gains tax (assuming there is a gain). It doesn't matter what you do with the money.
2007-04-10 07:13:11 · answer #3 · answered by r_kav 4 · 2⤊ 0⤋
The two year starts when you move into your house.
If you sell for a profit you would pay long term capital gains tax.
2007-04-10 07:15:15 · answer #4 · answered by Jo Blo 6 · 1⤊ 0⤋