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Thread: O.T.-capital gains

  1. #1
    phebus
    Can someone tell me the rules regarding the sale of a principal residence, and when and not, capital gains tax is required to be paid? (State of Ca., residence for 10 years).
    Thanks

  2. #2
    al cole'holic
    Can someone tell me the rules regarding the sale of a principal residence, and when and not, capital gains tax is required to be paid? (State of Ca., residence for 10 years).
    Thanks
    2 years, single $250k married $500k

  3. #3
    phebus
    So, if I understand, I don't pay any tax on the sale of my home for up to 500k in profits if I'm married? And, is there a period of time that the monies have to be reinvested, or is a done deal?

  4. #4
    al cole'holic
    So, if I understand, I don't pay any tax on the sale of my home for up to 500k in profits if I'm married? And, is there a period of time that the monies have to be reinvested, or is a done deal?
    ..done deal, no reinvestment needed.

  5. #5
    Newcastle
    So, if I understand, I don't pay any tax on the sale of my home for up to 500k in profits if I'm married? And, is there a period of time that the monies have to be reinvested, or is a done deal?
    From what my tax guy told me, and correct me if I'm wrong, so long as you have lived in that house for 2 of the last 5 years (and doesn't need to be consecutive) you don't get taxed up to 500k if you're married. Yes, it's a done deal. You do not need to re-invest within a certain amt of time, those were the old laws. If you're single, it's 250k per transaction. I've heard that each person has a cap of $1 million, so I'm assuming a married couple has a cap around $2 million, but not sure.
    Also, say you're married and your profit would be 600k if you sold. You keep 500k, and the other 100k is subject to cap gains tax. Not to say there aren't ways around it. I've heard that you can use repairs/upgrades including labor, materials, etc. to offset that tax. So if you can show how much $$ you've put into the house, subtract that, you shouldn't get taxed too much. But that's just what I've heard and keep your receipts

  6. #6
    phebus
    Thanks al cole'holic, now on to my next question.
    If I sell my vaction home in Havasu that I have had for over two years, what are my liabilities for capital gains taxes?
    Bottom line is we are thinking of selling our home in Ca. and the home we have in Az. and buy a new nice home in Havasu.

  7. #7
    al cole'holic
    Thanks al cole'holic, now on to my next question.
    If I sell my vaction home in Havasu that I have had for over two years, what are my liabilities for capital gains taxes?
    Bottom lin is we are thinking of selling our home in Ca. and the home we have in Az. and buy a new nice home in Havasu.
    If you have a very creative tax guy, you may get around certain things. You may be able to sell the Havasu house and do a 1031 to your new primary and defer the gains that way and be out clean on the gains of your CA home. If you need a great CPA I have one...

  8. #8
    phebus
    If we do have to pay capital gains tax on our AZ. vacation home, what rate is it payed at?

  9. #9
    al cole'holic
    If we do have to pay capital gains tax on our AZ. vacation home, what rate is it payed at?
    ..based on your earnings bracket I couldn't say. If you were self employed and could "not take a paycheck" lets say for the year, your only income would essentially be the sale of the house for the year and your income tax would be based on that alone...that is nice if you can do it.

  10. #10
    phebus
    So, do the profits just count as income, and you pay taxes on whatever your income tax rate is? I thought they were payed at a rate seperate from what your tax rate was on your net income for tax worked out to be.

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