2007-11-23 11:16:56 · 5 answers · asked by Stephanie Castro 1 in Business & Finance ➔ Renting & Real Estate
The 1997 taxpayer relief act made a big difference in the tax liability of those who sell their primary residence. As it stands today, almost no one will pay any federal taxes on the profit made from the sale of the home they live in. (defined by the Internal Revenue Service simply as the place you live most of the time Internal Revenue Code IRC Section 121). To qualify, you must have owned and occupied the home as your primary residence for a minimum of any two of the five years before you sell.
A single owner can take up to $250,000 gain free of any federal or state tax.
A married couple, filing jointly can take up to $500,000. gain free of any federal or state tax. Even if only one of them owns the property, the full $500,000. is available only if the non-owner spouse occupied the property for the required 2 years.
You can move back into income property for 2 years and pay no taxes on the portion you reside in (1/2 for a duplex, 1/4 for a fourplex).
You can even use part of the exclusion if you were in the house less than the full two years. If you move is required by one of three reasons: job transfer, health reasons, or some unforeseen reason.
Hope this helps.
Terry S.
http://www.Welcome2Arizona.com
2007-11-23 12:15:43 · answer #1 · answered by Terry S 5 · 0⤊ 0⤋
Maybe. But if you owned the house for at least 2 years of the five right before the sale, and lived in it as your main home for at least two of the same five years, you can exclude $250K of the gain ($500K on a joint return) from being taxed, so in most cases, no you wouldn't be taxed.
2007-11-23 11:40:45 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
Only in rare cases do you have to pay capitol gains on the sale of your personal home.
If your profit is less than $250,000 (or $500,000 for a married couple) and it has been your home for 3 of the last 5 years you are probably OK.
Check with the guy that does your taxes for all the details.
2007-11-23 11:25:33 · answer #3 · answered by glenn 7 · 1⤊ 1⤋
Hey Alter - you are one of these Yahoos!
The first poster is correct. In the future, I'd suggest checking on these things BEFORE you sell, not after. Tax ramifications are something you need to prepare for before taking action.
2007-11-23 11:51:17 · answer #4 · answered by godged 7 · 0⤊ 0⤋
You need the advise of a tax advisor, not these Yahoo's here. Capital gains isn't usually paid unless you surpassed the 2 year requirements to reinvest in another residence. Seek professional assistance and know for sure.
2007-11-23 11:28:49 · answer #5 · answered by Alterfemego 7 · 0⤊ 3⤋