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Irishlass
LIF Adult
Member since 5/05 2961 total posts
Name:
Lisa
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Capitol Gains Tax
We will be putting our house on the market in the next week or so. Some one mentioned to me that we would have to pay capitol gains tax. Does anyone know anything about this tax? My DH has owed this house for over 10 years I thought is it was under 2 you would have to pay. Any info would be appreciated.
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Posted 4/26/06 7:41 PM  |
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Tanaholic
My Big Boy!
Member since 10/05 2383 total posts
Name:
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Re: Capitol Gains Tax
I believe if you use the gain to buy another house you don't have to pay taxes.
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| Posted 4/26/06 8:57 PM |
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MikesWife
Wanting...........
Member since 1/06 6887 total posts
Name:
Karen
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Re: Capitol Gains Tax
This website might be helpful..........
http://www.irs.gov/faqs/faq10.html
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| Posted 4/27/06 7:40 AM |
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luvsun27
Check out my cool glasses
Member since 5/05 8135 total posts
Name:
Kim
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Re: Capitol Gains Tax
If he is the only one on the deed, the if he makes a profit over $250K he will have to pay the capital gains on the taxes...if you are both listed, then it's over 500K (250 per person).
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| Posted 4/27/06 9:01 AM |
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Irishlass
LIF Adult
Member since 5/05 2961 total posts
Name:
Lisa
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Re: Capitol Gains Tax
Thanks for the info. Now I have another question. He will probably make over $250K profit so does he only pay taxes on the diff or the whole amt. Say he made a profit of $20K - does he just pay on the $20K or full $270K?
Thanks
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| Posted 4/27/06 9:31 AM |
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Blu-ize
Plan B is Now Plan A
Member since 7/05 32475 total posts
Name:
Susan
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Re: Capitol Gains Tax
Posted by luvsun27
If he is the only one on the deed, the if he makes a profit over $250K he will have to pay the capital gains on the taxes...if you are both listed, then it's over 500K (250 per person).
If you buy another primary residence, I believe you will not owe taxes. I could be wrong about this, but also I though there was a 2 year contingency.
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| Posted 4/27/06 9:33 AM |
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meghanmetz
LIF Adolescent
Member since 5/05 525 total posts
Name:
Meghan
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Re: Capitol Gains Tax
If he is the only person on the deed and he makes a $270K gain, he is only taxed on $20K (amount above the $250K exemption for a single person that owns a home for 2 years)
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| Posted 4/27/06 9:50 AM |
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ODonnell
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Member since 9/05 5983 total posts
Name:
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Re: Capitol Gains Tax
If you use the profit towards another residence you do not have to pay the capital gains. If you also had major renovations to the home during the period your DH owned it, they can be off-set against the profit. So, if you don't buy another home, but you make a profit of $275,000 and spent $35,000 over the years on improvements, you won't pay any taxes. That's why it's a good idea to keep every receipt.
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| Posted 4/27/06 9:56 AM |
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DjPiLL
Member since 5/05 3664 total posts
Name:
Richard
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Re: Capitol Gains Tax
Um.... "moving the profits from one house to another" does NOT prevent you from paying capital gains on your primary residence.
This law is about 6 years old... and is no longer in effect.
If you owned the house for at least two years... you don't have to pay gains tax on up to 250k of profits of the house. It doesn't matter whether you buy another house or not.
If you did renovations to the house and have receipts... you can add these improvements to your cost basis... and possibly be able to take more than 250k tax free.
But again... this has nothing to do with "flipping the profits to a new house". Please don't think this is the case. A lot of people still believe this is the rule and its not the case anymore.
There is a loophole in the law in regards to "flipping the profits"... but it does not apply to your primary residence and there have to be a ton of conditions met in order to do this. Its not common.
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| Posted 4/27/06 12:20 PM |
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DjPiLL
Member since 5/05 3664 total posts
Name:
Richard
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Re: Capitol Gains Tax
Posted by Tanaholic
I believe if you use the gain to buy another house you don't have to pay taxes.
This is no longer true. See my above post. 
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| Posted 4/27/06 12:21 PM |
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chellynyc
LIF Infant
Member since 4/06 164 total posts
Name:
Michelle
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Re: Capitol Gains Tax
I'm selling my coop and I've only lived there for a year. My attorney told me that come next tax season I will have to pay capital gains tax on the profit I made. He did say that I can deduct closing costs and renovation costs...I just hope it's not too much $$.
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| Posted 4/27/06 12:37 PM |
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DjPiLL
Member since 5/05 3664 total posts
Name:
Richard
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Re: Capitol Gains Tax
Posted by chellynyc
I'm selling my coop and I've only lived there for a year. My attorney told me that come next tax season I will have to pay capital gains tax on the profit I made. He did say that I can deduct closing costs and renovation costs...I just hope it's not too much $$.
You will also only pay capital gains taxes prorated for the year you lived there.
For example... if you lived there for 23 out of 24 months. Its not like you pay full gains taxes. You pay about 1/24 worth.
In your case... it would be 1/2. And yeah you can deduct those items. Talk to a GOOD accountant next year.
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| Posted 4/27/06 12:45 PM |
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Bxgell2
Perfection
Member since 5/05 16438 total posts
Name:
Beth
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Re: Capitol Gains Tax
If the house is owned by the two of you, and you lived there for your primary residence for at least 2 years, you're only taxed on any profit over $500k, minus renovation costs. If it's just under his name, he will be taxed on any profit over $250k, again, minus any renovation costs.
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| Posted 4/27/06 1:13 PM |
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BrunetteMom
LIF Adult
Member since 8/05 1480 total posts
Name:
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Re: Capitol Gains Tax
Posted by DjPiLL
Um.... "moving the profits from one house to another" does NOT prevent you from paying capital gains on your primary residence.
This law is about 6 years old... and is no longer in effect.
If you owned the house for at least two years... you don't have to pay gains tax on up to 250k of profits of the house. It doesn't matter whether you buy another house or not.
If you did renovations to the house and have receipts... you can add these improvements to your cost basis... and possibly be able to take more than 250k tax free.
But again... this has nothing to do with "flipping the profits to a new house". Please don't think this is the case. A lot of people still believe this is the rule and its not the case anymore.
There is a loophole in the law in regards to "flipping the profits"... but it does not apply to your primary residence and there have to be a ton of conditions met in order to do this. Its not common.
Yep. you got it down 100%
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| Posted 4/27/06 1:23 PM |
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