For example if you sell a house for $65,000 and you only owe around $40,000 can you use the rest of the money to pay off other bills?
2007-09-04 04:45:16 · 9 answers · asked by brm1981 4 in Business & Finance ➔ Renting & Real Estate
I am 26 fyi!!!
Anyway for the people who weren't rude thanks for your help. I as asking what you have to pay like taxes and such. I got the answers I was looking for (mostly anyway) so thanks to everyone who answered.
My husband and I are considering selling our house to pay off some bills because my job isn't going too well (I own a daycare) and he doesn't make much. We also just had our first baby (a girl) 10 weeks ago. Things haven't been going well since then so we are kinda getting desperate. Thanks again!
2007-09-06 07:27:09 · update #1
Yes that is typically how it works. You basically sell the house for what the house is worth. If it is worth more than you owe then the rest is profit or a gain for you. If you are considering this it is recommended that you look into how this would effect your taxes but in most cases even with the extra taxes that you would have to pay you would come out better off.
2007-09-04 04:50:22 · answer #1 · answered by BJ 3 · 0⤊ 0⤋
As others have implied, there may be some tax liability depending on if and for how long you lived in the property recently. There are also costs associated with the process of closing the sale at a title company or other closing agent. You'll get a HUD statement just before closing that will tell you what your share of the costs will be, but the closing agent can estimate that for you in advance.
If you used the property as a rental, rather than owner occupied, you may be subject to either income taxes (if held less than a year) or capital gains taxes on the difference between what you paid for it plus improvements you made, less any depreciation you may have claimed in prior tax years and that subtotal subtracted from the selling price. The difference is taxable if it was not an owner occupied residence. Long term capital gains are taxed at 15%, ordinary income at whatever rate is applicable to your other sources of income plus this if you sold it in less than a year after purchasing it.
2007-09-04 12:05:36 · answer #2 · answered by John M 7 · 1⤊ 0⤋
How old are you? You sound like you're a 12 year old, doing some research for a project at school.
I really hope you haven't purchased a home, knowing as little about the process as you appear to know.
To answer your question, after you sell, you pay realtor fees of 6%, sometimes you pay closing costs too. If you haven't lived in your house for more than 2 years you have to pay capital gains taxes which are like 40%. You get to keep what's left and can use it for whatever you want.
2007-09-04 13:06:36 · answer #3 · answered by Roland'sMommy 6 · 0⤊ 1⤋
Yes and if you lived in it more than 2 of the last 5 years the profit will be tax free up to 250 per person.
2007-09-04 11:49:33 · answer #4 · answered by shipwreck 7 · 0⤊ 2⤋
Keep in mind that you have to pay capitol gains tax, but the rest is yours.
2007-09-04 12:50:29 · answer #5 · answered by Landlord 7 · 2⤊ 0⤋
Yes, however, I believe you will be taxed on that money as it is considered income. Talk to your banker, she/he will give you your answer that you are looking for.
2007-09-04 11:50:00 · answer #6 · answered by ishowtt4beads 4 · 0⤊ 0⤋
Yes. That's called the equity or profit. Spend it wisely. Good for you.
2007-09-04 11:58:22 · answer #7 · answered by psi2006 4 · 0⤊ 1⤋
That's how it works!
2007-09-04 11:52:49 · answer #8 · answered by Wounded Duck 7 · 0⤊ 0⤋
Heck yes......its called making money.
2007-09-04 12:12:40 · answer #9 · answered by Bob D 6 · 0⤊ 1⤋