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| *Loan,banking and credit>>>income tax |
How long do I need to live in my house before I can sell it without paying income taxes? |
I've been here almost a year, and want to move. Will I have to pay income tax on the sell, if I buy another house with the sale money? The link below is the IRS publication for the tax treatment of the sale of your primary residence. Qualifying for the maximum exclusion, $ 500K joint return $ 250K all other, you must meet the ownership and use test. You must have owned and used the property in 2 of the last 5 years from the date of sale. As you have only been in the house a year you will not qualify for the maximum exclusion. You can exclude less than the maximum under certain circumstances. The circumstances fall into three categories -- change in job, health consideration or unforeseen circumstances. It is unlikely you would qualify, however that conclusion can only be made based on a careful review of your circumstances. By the way, you sure you are going to have a gain for tax purposes? Given the market action in most areas of the country in the last year a tax gain on holding period of less than a year would be an outstanding deal. Source(s): http://www.irs.gov/publications/p523/ind... You never pay "income taxes" on the sale of real estate. You will have to pay a tax on the Cap gain unless you roll that gain into the purchase of another primary residence. There is not period of time to live in a home whereby you will not be taxed on the gain. Sorry. You are allowed up to $250K of profit ($500K if married filing jointly) exempt from tax when you sell your house if it has been your main residence for 2 of the last 5 years. You do not have to reinvest in another house to take advantage of this. I'm not sure if you can still avoid paying taxes on the profit if you reinvest at least as much as you sell your house for. I think that was done away with when the new tax laws for the current exemption was made, but I'm not sure. I think you're actually asking about Capital Gains tax. And, if you live in the house for 24 months within a 5 year period, then there is a $250K exemption ($500K for a couple) where you won't be taxed. You probably won't make that much in two years anyway so it should all be tax free. |
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