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Selling your home before the 2 year mark? If I was to sell my home before the 2 year mark , will the IRS tax me for the sale? We bought our home in Nov 2006 so it wont be 2 years until then....:confused: |
I believe as long as you invest the money from the sale into another home, the IRS won't care. Someone correct me if I am wrong |
as far as I knew you had to be there 2 years to avoid paying taxes on any profit. But Id call your accountant bc they would know for sure. Or just call H&R Block or something, they might be able to answer that quickly for you. |
you can pro-rate it for the amount of time that you've been there. so you'll get 16/24 of the $500,000 (if you're married $250,000 single) without paying tax. then you want to make sure you stay in your next house at least two years. |
Would there be any profit after only two years. I know here in California with the market the way it is people are foreclosing because of it. I know we have taken a loss on ours that we bought almost a year ago. |
After 4 years we won't even make a profit. :mad: Even if you are taxed on the profit it's only the profit and not the entire sale price. I would check with an accountant but also any real estate agent would know the law too. |
Im not even sure that I would make a profit.. however we are wanting a bigger home and well we wanted to take advatage of the fact its a buyers market.. since we just bought the home we would more than likely come out even... I am just worried of waiting too long to sale with the way things are going in the economy.... |
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If you are not buying another house...in order to use your exemption ($250,000 single/$500,000 married)...you have to have lived in it 2 years. Your basis for your home is the purchase price then you can add improvements you made (not repairs and general maintenance...like roofs)...then you would subtract that amount from your selling price. The difference between your selling price and the amount above is the amount the capital gains tax would be figured. That used to be about 15%. |
We just asked our accountant the same question last week when we had our taxes done. The best answer or advice i can give you is...talk to 'your' accountant...and that doesn't mean someone at a seasonal tax prep office. Real estate guidelines have changed over the last few years and there are many thing to consider...please talk to your accountant or make an appointment with one before you make any decision about selling your home. |
We've been wanting to sell our house, and we were told if we sell before the 2year mark we will be taxed. Our 2 year is in August, and with the way the market is now I'm sure even if we did put our house up it still wouldn't be sold by August :mad: :( |
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I know what you mean.. it seems like there are ALOT of homes in my neighorhood being put for sale..I don't know their reasons but they don't seem to be moving..:eek: |
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Wanna hear something funny? There's a home for sale here and the realtor company is Prudential. Prudential keeps sending out flyers advertising this home...to people in the neighborhood! I think their advertising to the wrong market. Why would I want to move into another house, very similar to mine, in the exact same neighborhood. I really don't know what the reason for the advertising to neighbors is, but one day I saw the realtor taking her signs down for an open house when I was pulling into the neighborhood, and I was so close to pulling her over and telling her to get a better advertising team, :confuse2: I'm sick of having her flyers hanging on my door! |
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