real estate question

[MRS FLYIN VEE]

we have a house in Havasu we are thinking about selling.. we have not owned it quite a year yet.. but someone told us that if we sell it before owning it for 2 years we get taxed alot of money.. is this true.. any help and suggestions are appritiated.. ;)

[GlastronGuy]

You get taxed on the gains

[Kachina26]

But if you make me a swinging deal you can claim a loss:D

[MRS FLYIN VEE]

how come you don't get taxed on the gains after 2 years.. :confused:

[GlastronGuy]

New tax law. It also depends on how much money you make on the sale. I believe it's 500k for a couple.
Be happy. You used to have to be 55.

[MRS FLYIN VEE]

wow.. thank you.. ;)

[Boatcop]

You have to have resided in the house (as a primary residence) for 2 out of the past 5 years.
I don't think the 2 year rule applies to a vacation home. You'd get soaked on the Capital Gains no matter how long you owned it.
(Unless it's changed since the last time I checked.)

[Dr. Eagle]

Originally posted by MRS FLYIN VEE
wow.. thank you.. ;)
Mrs FV. I think that only applies to your primary residence...

[MRS FLYIN VEE]

Originally posted by Boatcop
You have to have resided in the house (as a primary residence) for 2 out of the past 5 years.
I don't think the 2 year rule applies to a vacation home. You'd get soaked on the Capital Gains no matter how long you owned it.
(Unless it's changed since the last time I checked.)
thank you sweety.. it is a rental but we need a bigger garage so we need to sell. but if not I just have to deal with the 1 inch left on each side of the boat. :eek: :D

[MRS FLYIN VEE]

Originally posted by Dr. Eagle
Mrs FV. I think that only applies to your primary residence...
it is a vacation home so i need to dbl check I think.. ;)

[Mandelon]

Check with your tax guy. If you sell in less than one year, I believe you pay tax on the profit at your income rate. Keep it over a year and its at capital gains rate.
If you've rented it out, you may be able to do a 1031 exchange, and avoid taxes altogether.
Not positive on this so check with your accountant.

[MRS FLYIN VEE]

thanks.. so you can be serrious.. :D :D

[Dr. Eagle]

Originally posted by MRS FLYIN VEE
thanks.. so you can be serrious.. :D :D
Nuh uhhh.....

[MRS FLYIN VEE]

I'm surprised there wasn't a wise crack in there somewhere.. maybe there is and I missed it.. LOL!! :D

[Kilrtoy]

Help a brother out, sell it to us for the same price you bought,
That way you keep it in the family

[MRS FLYIN VEE]

Originally posted by Kilrtoy
Help a brother out, sell it to us for the same price you bought,
That way you keep it in the family
bre and andy were looking at it this weekend.. if you want I can have Jamie call you.. ;)

[Mandelon]

Why sell anyway? Just refi it and take out some $$$ for the next one. Keep it as a rental. The damn prices there increase so fast you would do well to own 4 or 5......

[MRS FLYIN VEE]

Originally posted by Mandelon
Why sell anyway? Just refi it and take out some $$$ for the next one. Keep it as a rental. The damn prices there increase so fast you would do well to own 4 or 5......
that is what we were thinking also.. since we have two kids we can keep them for them .. so they have something to look forward too. ;)

[SDLifesaver]

We looked into this. if you sell the first year you own you pay 28% on the profits, between the 1st and 2nd year, you pay 20% on the profits, after 2 years, free and clear. We just re-fied our house there and we really bummed on the appraisal. The houses are selling for about 30-40 thousand more than they are appraising at. we paid 26,000 for our lot 2 years ago, and a lot on our street is selling for 90,000 and is smaller and worse view. Keep it, don't sell.

[Mandelon]

Mr Nick, there has got to be some tax unless you have lived in it as your primary residence for 2 out of the last 5 years.
Refi appraisals are often conservative when compared to purchase appraisals.

[cdog]

I'm a Realtor in Anaheim Hills and just like Mandelon said Refi Appraisals are a joke. They usualy average 10-15% lower that current market sales value.
I would refi ,take out the equity and buy another home or sell it and do a 1031 exchange. These are the two best ways to get around the tax's.

[boatnam2]

i thought if you roll the money over to buy a new house you dont pay capital gains.maybe not im just a dumb old oil worker.

[phebus]

I think the key is "primary residence"

[Mandelon]

Originally posted by boatnam2
i thought if you roll the money over to buy a new house you dont pay capital gains.maybe not im just a dumb old oil worker.
You can do that in a 1031 exchange but it has to be like for like investment property.
You used to be able to do this with your home and not pay taxes but its been scrapped in favor of the $250,000 per person tax exemption, but the 2 out of 5 years residency still applies.

[Sherpa]

Mandy knows his stuff....
these rules are still in effect...........
--I'd say refi it, and buy a new place for yourself. keep the
original home...
great investment potential.
--Sherpa

[MRS FLYIN VEE]

Thank You all for the input.. I think we have decided to refi and keep the old house and put a down on a new one.. we would like to keep both so the kids have something to look forward too. ;)

[SoCalOffshore]

With investment property you can do a tax free 1031 exchange and defer taxation.
With your primary residence the 2 out of 5 years is the issue to get the $250,000 per person, $500,000 married filling jointly exemption.
Vacation homes, the issue is hold for atleast one year and get the capital gains rate, which is currently 15%. CA state has no cap gains break. This rate applies for virtually al capital transactions. Such as stocks and mutual funds.
Although, one can get creative and convert primary residences from vacation homes and to investment property. All it takes is time and some moving around.
:D

[Mandelon]

Originally posted by Sherpa
Mandy knows his stuff....
--Sherpa
I like Sherpa.....:D

[cdog]

Originally posted by SoCalOffshore
With investment property you can do a tax free 1031 exchange and defer taxation.
With your primary residence the 2 out of 5 years is the issue to get the $250,000 per person, $500,000 married filling jointly exemption.
Vacation homes, the issue is hold for atleast one year and get the capital gains rate, which is currently 15%. CA state has no cap gains break. This rate applies for virtually al capital transactions. Such as stocks and mutual funds.
Although, one can get creative and convert primary residences from vacation homes and to investment property. All it takes is time and some moving around.
:D
The Vacation home is in Havasu AZ. I don't belive they have the F'd up 15% witholding there. But there are ways to get around that also.

[Riverblender]

Originally posted by cdog
I'm a Realtor in Anaheim Hills and just like Mandelon said Refi Appraisals are a joke. They usualy average 10-15% lower that current market sales value.
I would refi ,take out the equity and buy another home or sell it and do a 1031 exchange. These are the two best ways to get around the tax's.
There Is a reason for appraisals being lower than current market conditions. Most major lending instutions won't accept an appraisal with time adjustments unless there are not enough recent sales that is within the past six months. If you do time adjustments and get a review and they find properties that could have been used without time adjustments they will cut the appraisers statad value by 10% automaticaly or the amount that you put in for time adjustments which ever is greater if not more.
Riverblender
PS by the way realtors always overvalue property when listing by 10% or more percent :)

[909er]

You guys are not selling it anymore?:eek!:

[MRS FLYIN VEE]

Originally posted by 909er
You guys are not selling it anymore?:eek!:
only to you.. :D shhhhh:D

[909er]

OK. We were gonna start crying:eek!: ;)

[MRS FLYIN VEE]

Originally posted by 909er
OK. We were gonna start crying:eek!: ;)
there's no crying in ***boat..:D :D :D

[Essex502]

Mrs. FV - We did the exact thing you're thinking about - refi'd the vacation LHC house and took the cash out and are building another house around the corner with a bigger garage on a better lot. We're keeping the first vacation house and are going to make it a rental and use the second as our new vacation house until we retire. It really doesn't take much money to build that second or third house. We are using no cash out-of-pocket to accomplish this - only the refi cash-out dollars.

[cdog]

Originally posted by Riverblender
There Is a reason for appraisals being lower than current market conditions. Most major lending instutions won't accept an appraisal with time adjustments unless there are not enough recent sales that is within the past six months. If you do time adjustments and get a review and they find properties that could have been used without time adjustments they will cut the appraisers statad value by 10% auntmaticaly or the amount that you put in for time adjustments which ever is greater if not more.
Riverblender
PS by the way realtors always overvalue property when listing by 10% or more percent :)
WRONG!
While I will admit 95% of the time a Realtor can get up to 10% more money for a home if it is listed in the MLS.
Appraisals for refis always come in lower than current market sales price.
In OC homes are not really priced by the compariables at this time but more often buy current prices and seller greed.
" If they got 600k for their house I should get 635k for mine. I've got a new garage door and new paint".
Can't tell you how many times i've heard this kind of statement.
Bottom line is, Lenders don't want you to tap all of your equity, if you forclose and the market turns they loose money.
It's really the stupid buyers offering 40k more than asking price that is driving up the prices.

[BrendellaJet]

Originally posted by cdog
It's really the stupid buyers offering 40k more than asking price that is driving up the prices.
No, actually its the buyers who are raising the prices. The market will bear what people are willing to pay!

[cdog]

Originally posted by BrendellaJet
No, actually its the buyers who are raising the prices. The market will bear what people are willing to pay!
That's what I said????:confused:

[al cole'holic]

Originally posted by cdog
It's really the stupid buyers offering 40k more than asking price that is driving up the prices.
...if you live in that neighborhood it ain't stupid :D
Case in point...my neighborhood is in the median realm of the 450-500k area for even the small 2 - 3 bedroom homes. Two weeks ago an agent in my old lady's office lists the house about 3 down from us for 689k, which we thought was a joke until they got a full price offer in the next day and is now sold :eek:
At that price, it works out to $313/sq'....which for my house would be looking at $1.2 :eek: :eek:
I will take new neighbors like that anytime :D

[haulina29]

The 2 year tax free 250/500 exemption also applies to second homes that are not rentals .

[Riverblender]

Originally posted by cdog
WRONG!
While I will admit 95% of the time a Realtor can get up to 10% more money for a home if it is listed in the MLS.
Appraisals for refis always come in lower than current market sales price.
In OC homes are not really priced by the compariables at this time but more often buy current prices and seller greed.
" If they got 600k for their house I should get 635k for mine. I've got a new garage door and new paint".
Can't tell you how many times i've heard this kind of statement.
Bottom line is, Lenders don't want you to tap all of your equity, if you forclose and the market turns they loose money.
It's really the stupid buyers offering 40k more than asking price that is driving up the prices.
There you go if the bank forcloses on a property and is upside down in value they don't call the realtor they call the appraiser and want to know why the stated value in the report is not there, and if they don't like your your explanations they sue the appraiser this happened to more than one appraiser the last market correction thus causing our E and O ins to go to work for us. Your statment is very true the price is set by what the market will bear at any given time but it will turn sometime and we as appraisers dont dont want to get caught in that again so a garage door and paint come on 5000 tops that is if Picasso came came back from the dead and did it himself.

[Essex502]

Originally posted by haulina29
The 2 year tax free 250/500 exemption also applies to second homes that are not rentals .
I think you are incorrect if you don't meet the 2 of of five year primary residence test.