New married couple must comply with tax, gain on his condo sold & tax loss on her condo sold & home purchase?

Answer 1

The three events you mention do not interact for tax purposes.

The gain on your condo is going to be tax-free if it was your personal residence for two of the last five years, and your gain was $250K or less. You can exclude this whether you sold the property before or after your marriage, and whether you file a joint or separate return.

The loss on her condo is not deductible. However, if she paid points on mortgage when she bought it, and the points were not deducted in full, then those points can be deducted when the condo is sold.

The home purchase is not a taxable event, but keep your settlement papers handy for next year's tax return.

Answer 2

The new home has no part in the income tax for the new couple. If he lived in his condo for two of the last five years he can take an exclusion toward the gain. If she had a loss that is of no consequences as the loss can not be used to off set any other income.

Answer 3

If he lived in his as his primary residence for 2 of the 5 years immediately prior to the sale, the gain is excludable, up to $250,000. When a couple marry and dispose of 2 homes the rules on the exclusion amount get a bit messy but he'll get at least that much and maybe more.

Her loss has no tax consequences as losses on the sale of a personal residence are not deductible.

There are no immediate tax consequences on the purchase of their new home, just keep careful records of all of the costs for next future reference when you eventually sell it.

Answer 4

I am not sure what your question is. But first point is, you cannot claim a loss on a personal residence. If you sold YOUR condo and realized a gain less than $250000 then there is no tax. I need more information to really answer the question.

Answer 5

What is the question? If the sale occurred prior to the marriage, and the marriage occurred in the tax year after the sale, then the tax law will differ from if it occurred in the same year.

Generally joint filings require you both to report together. The key is to try to find offsets or deductions to reduce the overall profit you claim on the sales, so that your tax burden will be lower.

I suggest you spring for an accountant to itemize your taxes, or purchase a tax program such as turbotax which will itemize for you.

Answer 6

Hard to tell how much you'd have to pay. The whole $10,000 won't be taxed - you can deduct items like realtor's commissions which will probably take care of a lot of the gain. If you have owned it for more that a year when you sell it, you would pay long term capital gains tax on the gain, which would be less than the ordinary income rate you'll pay if you sell it when you've owned it for a year or less.