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CathyB
Member since 5/05 19403 total posts
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If you sell your house
and use to proceeds toward a new house, do you have to pay tax on the sale?
We've been here a little over 4 years if that makes a difference.
Message edited 4/29/2008 9:20:17 PM.
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Posted 4/29/08 9:18 PM  |
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dpli
Daylight savings :)
Member since 5/05 13973 total posts
Name:
D
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Re: If you sell your house
I *think* that if you sell your primary residence and buy another home that will be your primary residence within a certain amount of time, you do not have to pay capital gains tax. I could be wrong, but I remember talking with my tax guy about this at some point.
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| Posted 4/29/08 10:30 PM |
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HelenZ
So worth the wait :)
Member since 10/07 2862 total posts
Name:
Helen
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Re: If you sell your house
I believe you only have to pay tax if you make a PROFIT in excess of $250K on the sale. I'm not sure but I remember hearing this when we sold my mom's house a few years ago.
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| Posted 4/29/08 10:51 PM |
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CathyB
Member since 5/05 19403 total posts
Name:
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Re: If you sell your house
That's what I thought, DH was sure we had to pay tax no matter what. I didn't want to call the tax accountant last night to settle our argument. 
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| Posted 4/30/08 7:35 AM |
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ali120206
2 Boys
Member since 7/06 17795 total posts
Name:
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Re: If you sell your house
Posted by HelenZ
I believe you only have to pay tax if you make a PROFIT in excess of $250K on the sale. I'm not sure but I remember hearing this when we sold my mom's house a few years ago.
Yes - and I think you have to be there at least 2 years.
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| Posted 4/30/08 8:09 AM |
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MommyofG
just the girls
Member since 5/05 9461 total posts
Name:
Janice
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Re: If you sell your house
I'll ask again but we were told we would only have to pay tax on home we purchased not the one we sell.
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| Posted 4/30/08 9:59 AM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: If you sell your house
Posted by MommyofG
I'll ask again but we were told we would only have to pay tax on home we purchased not the one we sell.
Not true.
This is what you should know: You are allowed to exempt up to 250k in profits off your taxes. If you are married, you can exempt up to 500k in profits as long as you declared the house your primary residence for two of the last five years.
It has nothing to do with buying a new home, or "moving or rolling over the profits to a new home". Please this the old law and if anybody tell you this tell them its WRONG.
If for some reason you can't declare the house as your primary residence for two of the past five years (example: because you only bought the house a year ago), you can pro-rate how much tax you pay by how long you have lived there.
So if you sold a house you only lived in for a year, and made 30k in profit, you only pay tax on 15k (since you lived there for one of the two required years).
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| Posted 4/30/08 10:22 AM |
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MommyofG
just the girls
Member since 5/05 9461 total posts
Name:
Janice
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Re: If you sell your house
Posted by ave1024
Posted by MommyofG
I'll ask again but we were told we would only have to pay tax on home we purchased not the one we sell.
Not true.
This is what you should know: You are allowed to exempt up to 250k in profits off your taxes. If you are married, you can exempt up to 500k in profits as long as you declared the house your primary residence for two of the last five years.
It has nothing to do with buying a new home, or "moving or rolling over the profits to a new home". Please this the old law and if anybody tell you this tell them its WRONG.
If for some reason you can't declare the house as your primary residence for two of the past five years (example: because you only bought the house a year ago), you can pro-rate how much tax you pay by how long you have lived there.
So if you sold a house you only lived in for a year, and made 30k in profit, you only pay tax on 15k (since you lived there for one of the two required years).
I guess its individual b/c we fall into all categories to not have to pay tax when we sell our home, so they were right. we only have to pay tax if we dont purchase a new home but we are.
thanks for the info though, could def help out others.
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| Posted 4/30/08 10:26 AM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: If you sell your house
Posted by MommyofG
I guess its individual b/c we fall into all categories to not have to pay tax when we sell our home, so they were right. we only have to pay tax if we dont purchase a new home but we are.
thanks for the info though, could def help out others.
What category did you fall into that you didn't have to pay tax because you bought a new home?
There are no exemptions for individuals (not business) that allow you to not pay tax if you buy a new home.
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| Posted 4/30/08 10:28 AM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: If you sell your house
Capital Gains Explained
The new capital gains tax law no longer requires this rollover into new property in order to keep the entire gain earned from a sale. Now, for couples filing jointly, any gain up to $500,000 is not taxable, regardless of whether the gain is rolled over into a new property. Singles are exempt for gains up to $250,000. These new laws take the place of the former rollover policy and over-55 exemption. And just to spell it out, sellers can no longer roll over their gains of over $500,000 in order to avoid capital gains taxes.
If somebody advised you that you would be exempt from paying taxes because you "rolled over" into a new home, you received bad advice and can easily risk an audit.
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| Posted 4/30/08 10:34 AM |
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MommyofG
just the girls
Member since 5/05 9461 total posts
Name:
Janice
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Re: If you sell your house
Posted by ave1024
Posted by MommyofG
I guess its individual b/c we fall into all categories to not have to pay tax when we sell our home, so they were right. we only have to pay tax if we dont purchase a new home but we are.
thanks for the info though, could def help out others.
What category did you fall into that you didn't have to pay tax because you bought a new home?
There are no exemptions for individuals (not business) that allow you to not pay tax if you buy a new home.
I am going based on what you wrote this part-
This is what you should know: You are allowed to exempt up to 250k in profits off your taxes. If you are married, you can exempt up to 500k in profits as long as you declared the house your primary residence for two of the last five years.
I meant individual as individual circumstances.
Our accountant is the one who told us. I forgot the reasoning just remembered good we only have to pay tax on the price of the new home not what we sell our home for or profit. and we can write off on our taxes what we paid for the new home.
Im just going by what my accountant told us.
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| Posted 4/30/08 10:35 AM |
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