Reply With QuoteI wouldn't worry about the CA tax but the IRS will want their share. Will be treated as ordinary income and taxed at your new tax bracket - whatever it will be based on the profit you realized.
OK here's the deal...I bought a house 50-50 with my girlfriend last December. She moved out in May and we just sold the place, it's in escrow. Is there anything that I could do to minimize the damage in the form of the California Franchise Tax Board 3.33% that they will take since I didn't own the house longer than 2 years?
I would appreciate any suggestions!
Thanks!
I wouldn't worry about the CA tax but the IRS will want their share. Will be treated as ordinary income and taxed at your new tax bracket - whatever it will be based on the profit you realized.
So... any hypothetical advice on how to keep the IRS from taking too much?
mo:
So... any hypothetical advice on how to keep the IRS from taking too much? It will be added as income come the end of the year and may even push you into the next bracket depending on how much you gained. You could consider dropping income off the books if you can for a while to adjust, if it is possible in your situation...
Talk with your accountant (if you don't have one, talk to a friend that uses one), but I think if you roll it over into another property it doesn't matter how long you've owned it, unless it was used as income property. This sounds like a primary residence. You should be able to buy something else without any tax consequences. good luck
summerlove:
Talk with your accountant (if you don't have one, talk to a friend that uses one), but I think if you roll it over into another property it doesn't matter how long you've owned it, unless it was used as income property. This sounds like a primary residence. You should be able to buy something else without any tax consequences. good luck ...ah yes, the good old days! No longer the case though. frown
I think Essex is right on this one. It will not be considered a long term gain and will be taxed at regular income rates.
I don't think there is any way out of the withholding if escrow sends it to the state for you....
So do I get taxed on the $80K that I'm making from the sale of the house or on the monies that I receive after broker fees and other costs are paid for?
al cole'holic:
summerlove:
Talk with your accountant (if you don't have one, talk to a friend that uses one), but I think if you roll it over into another property it doesn't matter how long you've owned it, unless it was used as income property. This sounds like a primary residence. You should be able to buy something else without any tax consequences. good luck ...ah yes, the good old days! No longer the case though.I didn't realize they changed the rules. Is it within 2 years? I thought it was only for income prop, but I guess I'm incorrect. I'll need to look into that. Thanks!
mo:
So do I get taxed on the $80K that I'm making from the sale of the house or on the monies that I receive after broker fees and other costs are paid for? How long have you actually been in the house?? Your net that you walk away with is what would be part of your income...in this market I have seen alot of people turning over property and saying the hell with the taxes because they still make out ok in the long run. Hopefully you have a good accountant to take care of you...
What is good is that a married couple can stay in a house for 2 years and realize up to $500k in gains and not pay a cent in taxes, or $250k for a single person.
[ August 25, 2003, 12:36 PM: Message edited by: al cole'holic ]
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