Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 04-13-2015, 10:26 AM
Junior Member
 
Join Date: Apr 2015
Posts: 1
Sale of primary residence

My wife and I contracted a builder 10/31/2012 and closed on the home 7/17/2013. We are contemplating selling the home already and need to know what tax implications (if any) we might run into based on the following:

Sell the home prior to the 24 month mark (we're at 21 months now).
Take gain from the home (approx $70K) and apply it to equity in new home.
Do not meet partial exclusion requirements (health, job, etc).

I understand the obvious easy answer is to wait 3 months, but situation could dictate otherwise.

I believe the old laws allowed you to "roll" your equity over without considering it a gain, but I'm having trouble locating anything in the IRS tax code indicating that is still the case. Please advise.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 04-13-2015, 11:35 AM
Moderator
 
Join Date: Oct 2010
Posts: 5,231
I understand the obvious easy answer is to wait 3 months, but situation could dictate otherwise. ==========>> I guess it depends; To qualify, you need to own and live in the property have your primary residence for at least 2 years out of the 5 years ending on the date of sale.

I believe the old laws allowed you to "roll" your equity over without considering it a gain, but I'm having trouble locating anything in the IRS tax code indicating that is still the case====>> The rollover or once-in-a-lifetime options were replaced with the current per-sale exclusion amounts. There is some logic to this law change because most people under the prior rules didn't recognize a taxable gain, because they rolled it over into another residence before May 7, 1997, the only way you could avoid paying taxes on your home-sale gain was to use the money to buy another, more-expensive house within 2years;however, you SELLIN’ your home before reaching the 2 years mark will find no pot of tax-free gold at the end of the rainbow. The profit of $70k generated from the sale of your home will be taxed at the long-term capital gains tax rate of either 0 or 15 %, depending on your tax bracket.
Profits from the sale of a home owned for more than one year but less than two years will be taxed at the long-term capital gains of either 0 or 15 %. Worse yet, homeowners buying and selling within a one year period are taxed at the ordinary income rate, anywhere from 10 to 35 or 39.6% in 2014.
.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Sale of Primary Residence with Rental jholst Rental Real-Estate 1 02-27-2015 02:15 AM
Cap Gains from Sale of Living Grantor's Primary Residence from Irrevocable Trust jwolf99 Capital Gains 0 04-13-2013 09:36 AM
Primary residence rental HelpPlease Rental Real-Estate 1 02-07-2013 03:21 AM
Primary Residence then Rental tadelstein Homeowner Tax 8 07-25-2011 07:37 AM
Primary Residence julioseventh Homeowner Tax 0 02-12-2009 04:58 PM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning