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boatnam2
05-19-2005, 01:44 PM
if you were to buy a house for roughly 620k never move into it sell it for 799k what is the capital gains going to be?

tamalewagon
05-19-2005, 01:48 PM
if you were to buy a house for roughly 620k never move into it sell it for 799k what is the capital gains going to be?
How many years did you keep the house? What will you do with the proceeds after the sale? Buy another property or stowe the cash?

Mandelon
05-19-2005, 01:52 PM
Um $179K If owned less than a year it will be taxed as regular income. Typically about 40% of the total will go to state and fed taxes.
If you owned it over a year, its taxed at long term capital gains rate which is 15% or 20% as I recall.
If you haven't sold it yet you could do a tax deferred exchange into another one. If you never lived in it...your intent was to keep it as a rental......but your plans changed......so it might be eligible.
Check with a real tax guy, not a bunch of retard ***boaters..... :p

boatnam2
05-19-2005, 01:58 PM
yea i will, i was just thinking out load.we sold are old house and were using the money for the new house but if i can get what i think i can i was thinking i wont even move in sale it and wondered how hard i would get hit.i will use 40% as the number.

bohica
05-19-2005, 02:03 PM
Mandelon is correct if the property was held for less than 1 year - Ordinary income rates.
For long term > 1 year, rate is 15% of the gain. If you are in a lower income tax bracket, 10% or 15%, the rate goes down to 5%. A 0% rate replaces the 5% rate for tax years beginning after 12/31/07.

rivercrazy
05-19-2005, 02:03 PM
If you prove you lived in the house for two years, you don't pay taxes on the first $250K of gain, or up to $500K if married and filing jointly.
Or if you can prove it was investment property (not your primary residence or vacation home), you can probably do a 1031 exchange but there are time limits.
If its a second home or vacation home and you held it for over a year, the capital gains tax rate is 15%.
Otherwise the gain is ordinary income and will be taxed as such.

jdogginla
05-19-2005, 02:34 PM
If you prove you lived in the house for two years, you don't pay taxes on the first $250K of gain, or up to $500K if married and filing jointly.
Or if you can prove it was investment property (not your primary residence or vacation home), you can probably do a 1031 exchange but there are time limits.
If its a second home or vacation home and you held it for over a year, the capital gains tax rate is 15%.
Otherwise the gain is ordinary income and will be taxed as such.
I believe this is the correct answer.

ROZ
05-19-2005, 03:49 PM
RC, Now I believe it's up to 650K married and filing jointly...
A person also needs to remember that that's from the original purchase price and all the money you pulled out to buy property, pay off debt, or buy toys with is a part of that 650k... Adding to the house or making home improvements isn't so bad since it hopefully brought your home value up the cost improvements. In other words, remember to save some dough to pay off capitol gains. My pops has had plenty of new peeps who have come in who didn't save to pay taxes over the 650k and are now up shit creek making the IRS payments until they can refi to take money out of new house equity....

Mandelon
05-19-2005, 04:03 PM
Yah I found that out too... I did a lilttle cashout refi on some units that I later exchanged...oops. Had to come up with the money in escrow. :mad: