I'm selling my primary house in PA and am figuring on getting a $30,000 profit after I pay off the mortage. How much net profit will i have after taxes? i need it for a down payment at my new house.
2007-04-17 09:50:02 · 6 answers · asked by woodworker2090 2 in Business & Finance ➔ Renting & Real Estate
Generally, iIf you have not sold a primary residence in the last two years and have been living in this house as your primary residence for at least two years, the first $250k of capital gains is not taxable if you are single. First $500k is excluded if married and filing taxes jointly. You can find more info at www.irs.gov.
My understanding is that capital gains taxes are divided into two categories: short-term capital gains and long-term capital gains. I believe short-term gains are taxed at your federal income tax rate. Long-term capital gains may be a flat rate, I recall something like 20%...
If you have already taken the primary residence tax exclusion in the last two years or if you have not lived in your home for two years, you should consult your tax advisor regarding prorated exclusion schedules. You might want to gather up all of your improvement receipts during your ownership period as these will help offset your gain if you're under the two year timeline. It would be a good idea to call your tax folks and just ask the question as they are really the only ones qualified to give tax advice.
Sounds like you will be comfortably under the maximum exclusions. You should talk with your real estate professional about the other fees you may incur while selling and have him/her give you an "estimated seller proceeds" worksheet so you know what your net actually looks like.
You may also want to use the same real estate professional for your sale AND your purchase, negotiating yourself a better deal on either the commission you pay to sell your home or credits from your agent on the purchase of your new one.
If you don't have an agent, make sure to get referrals from friends and family who had good experiences with their agents/consultants.
2007-04-17 10:16:57 · answer #1 · answered by KConsults 3 · 0⤊ 0⤋
When selling a primary residence, individuals are allowed to keep up to $250,000 of profits tax free (and couples up to $500,000), provided you've lived in the house for at least 2 years (or 2 years out of the last 5 years).
Congrats! You get to keep all of it!
2007-04-17 10:07:39 · answer #2 · answered by scarr1901 1 · 0⤊ 0⤋
Two issues. If it's put into your new house nothing. Second you are allowed to make a profit up to 250,000 last I knew without taxes for a primary residence that you have been in for two to 2.5 years.
2007-04-17 10:05:37 · answer #3 · answered by p2ponly 3 · 0⤊ 0⤋
If you lived in it as your main home for at least two of the five years immediately before the sale, and owned it for two of those same five years, you won't pay federal tax on the sale.
I just checked the PA book (I prepare taxes in PA) and it looks like, as long as you lived there and owned it for two years, you can exclude the gain there also.
So except for items like realtor's commission, looks like the gain is yours.
2007-04-17 10:08:13 · answer #4 · answered by Judy 7 · 0⤊ 0⤋
no tax at all if its your primary residence for the past 2 years
2007-04-17 09:57:23 · answer #5 · answered by Ronny W 1 · 0⤊ 0⤋
You won't have to pay any income taxes at all, as long as you've lived in the home for 2 years.
The only tax you'll pay is excise tax and other closing costs--- excise tax in my county is 1.78%. Deduct realtor fees and other closing costs to estimate what you'll walk away with.
2007-04-17 10:37:14 · answer #6 · answered by Anonymous · 0⤊ 0⤋