Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 10-11-2018, 06:39 AM
Junior Member
 
Join Date: Sep 2014
Posts: 4
Do I Need To Sell My Home As Regular Capital Gains Sale?

Hello,

I have a home that I intend to sell within the next 6 months, or possibly sooner (perhaps before Jan. 1, 2019). I am confused about how I must sell it, or what options I have to minimize my tax obligations.

My home was bought by my parents in 1973. My parents and I were all on the title. My mother passed away in 1984, with my father and I as the remaining survivors. My father died last year, and now I am the sole owner.

I do not live in the house, and have not lived there since the 1970s. I have lived in apartments for the last 40-odd years.

How must I sell the house? Is this a regular sale with capital gains tax consequences? Do I have to sell it as an investment property?

Please help clarify the situation. Many thanks.

Josef



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 10-12-2018, 06:05 AM
Moderator
 
Join Date: Oct 2010
Posts: 5,127
How must I sell the house? ========basically, If you have a gain from the sale of your main home, you may be able to exclude up to $250k of the gain from your income ($500k on a joint return in most cases).If you can exclude all of the gain, you do not need to report the sale on your tax return:but, If you have gain that cannot be excluded, it is taxable. You need to report it on Sch D Form 1040 .your long term capital gain tax rate is 0 %aslongas your tax rate is 25%or lower or 15% if your rate is higher than 25%

In general, to qualify for the Section 121 exclusion, you must meet both the ownership test and the use test. You're eligible for the exclusion if you have owned and used your home as your main home for a period aggregating at least two years out of the five years prior to its date of sale.Unmarried individuals can exclude up to $250k in profit from the sale of their main home. You can exclude $500kif you're married: You must have lived in the home for a minimum of 2 out of the last 5 years immediately preceding the date of the sale. since you do not qualify the conditions,

Is this a regular sale with capital gains tax consequences?=========correct.as mentioned above.as you said, you intend to sell within the next 6 months, or possibly sooner (perhaps before Jan. 1, 2019), no choice or you.so you must pay capital gain tax on the gain.

Do I have to sell it as an investment property?============to sell as an investment pty, you need to rent it out by converting it into investment pty.when you sell it as investment pty, all of your profits are subject to either capital gains tax or sec 1250 depreciation recapture tax taxed t 25% as regular inncome.
If you sold your home under a contract that provides for all or part of the selling price to be paid in a later year, you made an installment sale. If you have an installment sale, report the sale under the installment method unless you elect out. Even if you use the installment method to defer some of the gain, the exclusion of gain under Section 121 remains available



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
  #3 (permalink)  
Old 10-13-2018, 07:40 PM
Moderator
 
Join Date: Oct 2010
Posts: 5,127
sorry it is mybad; You need to report it on Sch D Form 1040 .your long term capital gain tax rate is 0 %aslongas your tax rate is 15% NOT 25%or lower or 15% if your rate is higher than 15% NOT 25%. please make a note of this.



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
Capital Gains on Sale of a Second Home rscrowley Itemized Deductions 1 02-28-2018 06:59 AM
Capital gains on sale of second home srschreuder Capital Gains 1 12-09-2017 01:14 AM
Home Sale / Capital Gains Tax? dusabrive Capital Gains 1 06-22-2017 07:31 PM
Once capital gains are paid is the balance still taxable regular income. tommy Capital Gains 1 03-31-2015 11:32 PM
Capital Gains vs. Regular Income hoangtu69 Capital Gains 3 11-17-2014 11:25 AM

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