You get an exemption of $250,000 tax free. $500,000 if you are married and wife is on title. You will pay tax on the rest of your gain.
This exemption only applies after 2 full years of ownership.......
Prior to the 2 year mark, you will pay capital gains tax on any gain (unless you fit one of the four IRC exceptions)
Van Wilder, how far away are you planning on moving?
You get an exemption of $250,000 tax free. $500,000 if you are married and wife is on title. You will pay tax on the rest of your gain. You can deduct out improvements but have to I believe add back in depreciation taken.
If you owned it for more than a year it will be at capital gains rate, which I think is 20% fed and around 9% CA state, I think this is pretty accurate, but check with a tax preparer to be sure.
Is it only one year lived in?
ssmike. Thanks.
I want to stay around here, just trying to upgrade a bit.
...are you self employed by any chance?? :idea:
Yes we own our own business....
Yes we own our own business....
This will give you the ability to get very creative if you would like to avoid some large tax consequences on selling a property prior to the 2 year mark
This exemption only applies after 2 full years of ownership.......
Prior to the 2 year mark, you will pay capital gains tax on any gain (unless you fit one of the four IRC exceptions)
Van Wilder, how far away are you planning on moving?
Yep, he is right, you need to have lived in it two out of the last 5 years...I didn't notice you said you'd lived in it only a year a half... :squiggle: you should wait.
The problem is, you cannot buy a owner occupied property with a exchange. You would have to show it as a rental for a while. How long exactly? I'm not sure.
I think a year works alright. The law as I understand it states "intent".....so there is some leeway.
I had a friend who leased her house to her boyfriend for 6 months, exchanged for a new house, leased that to her boyfriend for 6 months too. She actually "rented" a room in each house for that time. After the 6 months she "converted" them to personal ownership.....they got married. :hammerhea
I think it will work alright.......... unless she gets audited.....:wink:
Posting Permissions
Reply With Quote