I wasn't going to flip it but I've found a much better area I wish to live in. I bought it last July 2007, for $501K, put $50K into it, it's worth maybe $580K now. Thank-you.
2007-05-10 20:42:23 · 5 answers · asked by SQD 2 in Business & Finance ➔ Taxes ➔ United States
Belle3's answer about taking $125 for one year makes sense...will check on it.
Well, that said it doesn't make sense the IRS only allows $250/500 for people who've been in their homes for 20 years!!
2007-05-11 07:03:50 · update #1
For the $250K exclusion as a single person, ($500k as a married couple), you need to live in the home as your primary residence for 2 years.
But you can claim 1/2 of that amount or $125K in one year. According to your question you would realize a profit of $29,000 if you sold for $580K in 7/2007. You bought the house last July in 2006.
So if you stay in it for 2 more months, which will probably be less than the time needed to sell it, you owe nothing to Uncle Sam.
Enjoy your next new home
2007-05-10 21:01:20 · answer #1 · answered by BELLE3 2 · 1⤊ 3⤋
Without an exception such as a change in employment requiring relocation, you have to own and live in your house for two years to exclude up to $250K of the gain on the sale of your house.
You bought the house for $501K, and "put $50K into it." If this money was for improvements, then your basis is $551K. If you sell it for $580K you will have little or no gain after the selling commissions are subtracted.
2007-05-10 20:52:29 · answer #2 · answered by ninasgramma 7 · 2⤊ 0⤋
You must LIVE in it as your principal residence for 2 of the 5 years immediately prior to the sale to exclude any of the gain from tax. If this is not your principal residence, you cannot exclude the gain no matter how long you own the property.
At the moment, you're pretty close to the break-even point when you figure a 6% sales commission on the sale. You're about $6,000 in the hole at the moment so if you sold it now you wouldn't have any taxable gain.
2007-05-10 21:29:59 · answer #3 · answered by Bostonian In MO 7 · 0⤊ 1⤋
Did you hear what Joe mentioned approximately "putting some greater vans on the line and hiring some greater adult males"? Joe needs to construct that corporation. With some stable corporation skills - and IF Obama would not TAKE his funds by way of TAXES - Joe can actual arise to the place the quantity pronounced on his tax return IS up there at $250K - in spite of if all of it would not stay in his pocket. He desires that to RE-positioned funds into his corporation. he additionally gets caught with dissimilar hidden taxes that are caught in the tax codes that burden small agencies. people who're salaried workers have not have been given any theory of the hidden fees of working small agencies. JOE does understand. If he has been wanting to purchase that small corporation, he's familiar with each and every DIME that the government takes. So do small corporation human beings throughout usa of america. Why do you think of we are vote casting for McCain?????? human beings like JOE hire human beings such as you. Or if Obama is elected - they won't hire you. Take your p.c...
2016-10-04 21:31:05 · answer #4 · answered by ? 4 · 0⤊ 0⤋
Two years. But maybe paying the tax is worth it, if you really want to move - from the numbers you give, it wouldn't be a whole lot. You will also be able to deduct and sales expenses like commissions. That might eliminate any gain, and any tax.
2007-05-11 02:55:53 · answer #5 · answered by Judy 7 · 0⤊ 0⤋