I made a profit of $10,000 after I sold my home. Do I have to pay taxes on this profit?

If I do have to pay taxes is there a time limit to put the money towards another house without paying taxes?

This is copied from IRS publication no. 17, which you can read at http://www.irs.gov

"You can exclude up to $250,000 of the gain on the sale of your main home if all of the following are true.
* You meet the ownership test.
* You meet the use test.
* During the 2-year period ending on the date of the sale, you did not exclude gain from the sale of another home...

"Ownership and Use Tests
To claim the exclusion, you must meet the ownership and use tests. This means that during the 5-year period ending on the date of the sale, you must have:
Owned the home for at least 2 years (the ownership test), and
Lived in the home as your main home for at least 2 years (the use test)."

If you can exclude the profit, then you don't need to report the sale.

you pay capital gains tax if you sold your house in less than 2 years after your bought it. if you sold it after 2 years, then no.

You may qualify to exclude from your income all or part of any gain from the sale of your main home. This means that, if you qualify, you will not have to pay tax on the gain up to the limit described under Maximum Exclusion, next. To qualify, you must meet the ownership and use tests described later.

You can choose not to take the exclusion by including the gain from the sale in your gross income on your tax return for the year of the sale.

Maximum Exclusion
You can exclude up to $250,000 of the gain on the sale of your main home if all of the following are true.

You meet the ownership test.

You meet the use test.

During the 2-year period ending on the date of the sale, you did not exclude gain from the sale of another home.
--------------------------------------...
You can exclude up to $500,000 of the gain on the sale of your main home if all of the following are true.

You are married and file a joint return for the year.

Either you or your spouse meets the ownership test.

Both you and your spouse meet the use test.

During the 2-year period ending on the date of the , neither you nor your spouse excluded gain from the sale of another home.

Ownership and Use Tests
To claim the exclusion, you must meet the ownership and use tests. This means that during the 5-year period ending on the date of the sale, you must have:

Owned the home for at least 2 years (the ownership test), and

Lived in the home as your main home for at least 2 years (the use test).

Exception. If you owned and lived in the property as your main home for less than 2 years, you can still claim an exclusion in some cases. The maximum amount you can claim will be reduced. See Reduced Maximum Exclusion, later.

Example 1â€”home owned and occupied for 3 years.

Amanda bought and moved into her main home in September 2003. She sold the home at a gain on September 15, 2006. During the 5-year period ending on the date of sale (September 16, 2001 - September 15, 2006), she owned and lived in the home for 3 years. She meets the ownership and use tests.

Example 2â€”met ownership test but not use test.

Dan bought a home in 2000. After living in it for 6 months, he moved out. He never lived in the home again and sold it at a gain on June 28, 2006. He owned the home during the entire 5-year period ending on the date of sale (June 29, 2001 - June 28, 2006). However, he did not live in it for the required 2 years. He meets the ownership test but not the use test. He cannot exclude any part of his gain on the sale, unless he qualified for a reduced maximum exclusion (explained later).

Period of Ownership and Use
The required 2 years of ownership and use during the 5-year period ending on the date of the sale do not have to be continuous.

You meet the tests if you can show that you owned and lived in the property as your main home for either 24 full months or 730 days (365 Ã— 2) during the 5-year period ending on the date of sale.

The rule about deferring tax if you put the profit toward a new house went out many years ago.

If you owned the house, and lived in it as your main residence, for at least two of the five years immediately prior to the sale, then you don't have to pay tax on the profit. If you did not meet those rules, then you'd pay capital gains tax.

I think that when you file taxes next year, there's a section about selling your home. You might have to pay taxes on it.

I think ,you can have for your personal property you lived in around 450,000 Dollar profit in a lifetime, you should look that up. By the way, that's not profit. You put over the years taxes, repairs, interest, real estate agent payments in you property. Every year the inflation is around 3,5% that would make a house of $100,000 worth after adjustment for inflation roughly $160,000 in ten years, without a gain.

Have you really made a profit? Let's see. Say you purchased your home for 100,000.00 from the time you have lived in your home until the time you sold your home you have made, home improvements of say 5,000.00 then you have made repairs, (new roof, or new kitchen, or new carpeting etc) of 7,000.00. Well that's a 12,000.00 additional expense and hopefully you have credit card or a form of receipt to prove this. No...and most people purchasing and living in a home more than 5 years have big expenses. Then you can consider this also, purchase a like kind,(residence) of more than you sold your home for and you do not need to worry about the gain.

Yes, and yes, contact IRS for the Rules concerning capital gains...
you have 4000 in capital gains tax that you need to write off...do you have receipts against the gain? Such as what you paid in commisions etc....lots of rules here...how long did you live there? was this your principle residence, and how long before you buy again?

Enter Your Message or Comment

User Name:
User Email:
Post a comment:

Archive: Forum -Forum -Finance - Links - 1 - 2 - RSS - All RSS Feeds
The Causes and the Results. 0.064
Copyright (c) 2011 Financial Crisis Tuesday, May 29, 2012 - Terms of use - Privacy Policy