This is the first home my husband and I have owned, it's a condominium that was purchased 10 months ago. We just experienced a flood due to an improperly installed valve. We are selling the condo back to the builders (as it was brand new when purchased and this was VERY unforseen). We will be purchasing a new home and rolling all equity into it (there will be about $20,000 in equity with the buy-back due to current market value). Will we have to pay capital gains on the $20,000? Will this fall under "Unforseen Circumstances" and qualify for a lower exclusion? Or is there something else??? THANKS!
2007-07-10 10:09:05 · 3 answers · asked by AriesJWR 4 in Business & Finance ➔ Taxes ➔ Other - Taxes
You should qualify for a proportional reduction in the exclusion amount. It would be 10/24ths of the $500k exclusion and would therefore avoid any tax.
2007-07-10 10:18:35 · answer #1 · answered by Bostonian In MO 7 · 1⤊ 1⤋
Nope. You wouldn't anyway if you planed on turning it right around into another home. But there are new laws that says you don't have to if its under a certain amount regardless if you used gains to purchase another home or not. See article link below...
2007-07-10 10:14:56 · answer #2 · answered by slushpile reader 6 · 0⤊ 3⤋
You will NOT have to pay capital gains tax. Persons living in the house, selling it, and moving to another house pay no tax on the money up to something like $150,000, so you have no worries there. I'm not a tax attorney, but I've gone through a couple of these things.
2007-07-10 10:18:05 · answer #3 · answered by skwonripken 6 · 0⤊ 4⤋