If the house was your personal residence, you can either pay the tax of 15% of the capital gain, or defer the gain by purchasing another home of greater value--I think within 2 years.
This is not correct, there is NO LONGER a stipulation syaing yo must buy up, that was removed from the tax code in 1997.
If it is you primary residence, you can take 250k for single or 500k married tax free. You can take the tax free money every 2 years. The code reads you must have lived in the house 2 years out of the last 5.
This is correct, but Bill, you are a Baller just call your CPA. I wouldn't take tax advise from HB.
Don't forget the state you live in will also tax that profit from the sale. California taxes it at "ordinary income" rates - no "capital gains" rate. That means the profit is added onto your gross wages and salary total for the year. If you kept good records of the capital improvements you made to the house such as hardscape, patios, patio covers, pool, etc...those reduce the profit dollar for dollar.
The was some talk about pro-rating the $250/500K exclusion for primaray residence for 2 years so that you could take, say, 75% of the exclusion if you lived in the house for 1-1/2 years for example. I don't remember what became of that.
You need to live in the house for 2 out of the last 5 years to avoid capital gains. If you live in your home for 2 out of the last 5 years you can profit up to $500,000 per couple and $250,000 for a single person.1031 exchange is only for non-owner occupied properties.
Let me know if you want a second opinion on your home. I am a top REALTOR in East County and have sold some stuff in Scripps Ranch.
www.SELLwithSCOTT.com
Call me dude!! I can't believe you even started this thread
SangerPete,
I just sold a lot for 100 g's, got $40,000 up front and am carrying $60,000 for 5 years. Can I still do a 1031 on the balance since the escrow closed more than 90 days ago? My accountant says no but iffin he's wrong- I'm goin to kill him!
Rio
You are screwed.
Mr. Willie,
A baller like you can nut up the 250-300pr hour your CPA will charge you to correctly answer the question.
Don't forget the state you live in will also tax that profit from the sale. California taxes it at "ordinary income" rates - no "capital gains" rate. That means the profit is added onto your gross wages and salary total for the year. If you kept good records of the capital improvements you made to the house such as hardscape, patios, patio covers, pool, etc...those reduce the profit dollar for dollar.
The was some talk about pro-rating the $250/500K exclusion for primaray residence for 2 years so that you could take, say, 75% of the exclusion if you lived in the house for 1-1/2 years for example. I don't remember what became of that.
Most of thet is for a hardship sale. The IRS has guidelines for a percentage you can take depending on the situation. The only reason i know is because I used it and had to sell from a hardship, but they still tax you for the remaining period...occupied for 75% of 2 years then you pay on 25% of gains. Otherwise with no hardship it is 100% of the gain.
I pay a CPA $1000 a month to represent my company but that bastard is always on vacation!I guess I thought there were alot of smart peoples on this board that one might know the answer... I will call him when he gets home!!
Mike you sell in San Diego??
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