capitol gains

[cxr133]

hey i lookd for this info on the internet ..but could not find the info needed i decided to try the second best place: :crossx:
My friend has lived in his new house in lancaster about one year- to a year and a half.
he now wants to sell and move closer back to the city (santa clarita or valencia). what is the law on capital gain taxes?
is it true that you dont have to pay on capital gain if it is less than 250,000 if your single and 500,00 married?
he said some Real Estate agent told him about a 1031 form.. but thats for income property right?
Thanks
cxr

[Brewzed]

I sure about the dollar amounts, but I'm pretty sure you have to be in it for at least 2 years.

[CornWater]

hey i lookd for this info on the internet ..but could not find the info needed i decided to try the second best place: :crossx:
My friend has lived in his new house in lancaster about one year- to a year and a half.
he now wants to sell and move closer back to the city (santa clarita or valencia). what is the law on capitol gain taxes?
is it true that you dont have to pay on capitol gain if it is less than 250,000 if your single and 500,00 married?
he said some Real Estate agent told him about a 1031 form.. but thats for income property right?
Thanks
cxr
Is the house he is buying more expensive than the one he is selling???

[ROCCO]

10-31 s for income property only...
he definately needs to wait the 2 years...after that, the money is all his

[572Daytona]

2 years out of the last 5 as a primary residence. Here's the official IRS publication:
http://www.irs.gov/pub/irs-pdf/p523.pdf
Moving to a more expensive house is no longer necessary.

[SHAKEN Not Stirred]

Here.....Let me help.......
It's "CAPITAL", not capitol......
No problem.....Anytime......You're welcome.....Glad to help.....
Later,
CJG
:p

[cxr133]

THANKS guys... this is the info i needed

[cxr133]

Here.....Let me help.......
It's "CAPITAL", not capitol......
No problem.....Anytime......You're welcome.....Glad to help.....
Later,
CJG
:p
thanks.. i fixed it its not one of those words i sepll (LOL) :crossx: too often...

[SHAKEN Not Stirred]

thanks.. i fixed it its not one of those words i sepll (LOL) :crossx: too often...
Hehe!!!
Have a good weekend.....
Later,
CJG
:)

[ChumpChange]

he definately needs to wait the 2 years...after that, the money is all his
Do him a favor and tell him to talk to a CPA and not too much advice from here, including mine. There are some ways around the two years, one being extreme circumstances for job relocation amongst other things.
There are loopholes for many things and there are many for real estate. Talk to a few 'professionals'.

[Focker]

Im A Cpa
Pm Me And Ill Tell U All The Rules

[Ivan Dan]

hey i lookd for this info on the internet ..but could not find the info needed i decided to try the second best place: :crossx:
My friend has lived in his new house in lancaster about one year- to a year and a half.
he now wants to sell and move closer back to the city (santa clarita or valencia). what is the law on capital gain taxes?
is it true that you dont have to pay on capital gain if it is less than 250,000 if your single and 500,00 married?
he said some Real Estate agent told him about a 1031 form.. but thats for income property right?
Thanks
cxr
There are basically 3 categories that might allow you to avoid paying capital gains when selling a primary residence before 2 years of living in the property (any 2 years in a 5 year period).
1) Change in a place of employment (must be atleast 50 miles farther from your home that your old job)
2) Health which includes anyone that lives in the property (child, spouse, parent, grand parent, etc.) as I understand sometimes can require a doctors recommendation.
3) Unforseen Circumstances which is basically an event or occurence that you could not have forseen or reasonably anticipated to happen before purchasing said property. (This one can be a little tricky or creative IMHO because it could include things like death, divorce, or having multiple kids at a time like twins or more.
Hope this info helps! If I can help with any other real estate questions feel free to have your friend e-mail me direct. Dan@DanKaatz.com

[BigDoug]

When i moved from Kingman 7 months ago i was in that house for a year and made a profit from selling, so we were a little on edge wondering about payiny those gains ??????????????????? we moved to Havasu which is 60 miles from Kingman, so we made the "over 50 mile rule" we will not have to pay capital gains.......whewwww :)
Hope this helps you.

[bchbum]

I think he needs to be over 55 , to not pay capitol gains on the $250,000 . If the wife is also over55 ,than it's $500,ooo . :cool:

[socalmofo]

I think he needs to be over 55 , to not pay capitol gains on the $250,000 . If the wife is also over55 ,than it's $500,ooo . :cool:
Wrong. Single person has an exemption on $250,000 and a married couple has $500,000. This is given when they have lived in the property 2 out of the last 5 years or one on the previous reasons given.

[selfmade]

Your buddy can do what is called a 1031 exchange but the new home he is purchasing must be worth more than the home he is selling and there is a fee for the 1031 but it isnt that expensive.

[mike37]

the one thing I know is if you take all the money from the sale of the primary residence and us it for purchase of new primary residence your good

[doesitfloat?]

I think he needs to be over 55 , to not pay capitol gains on the $250,000 . If the wife is also over55 ,than it's $500,ooo . :cool:
Sorry, that's incorrect. I have used the capital gains break twice in the last 7 years...and I'm a good 20 years from being 55.
One thing to remember, CXR, is that the real estate fees are deducted from any gains he may have. Example: $500,000 house. Was bought 1 1/2 years ago for $450,000. His gain is $50,000...but the 6% real estate fee is $30,000. So, his taxable gain is $20,000.
I have a friend in NorCal who wants to move here (Idaho) but he keeps talking about having to wait another 8 months to be there 2 years so he can get the tax break. Problem is that his $500,000 condo has only appreciated about $30,000...about the same as his future real estate fees! So he won't owe anything.
It's just an excuse for him...