My husband and I are selling our house and moving to a new house. We have lived in our house for a year and 6 months. I am not sure if we will be taxed on the profit. We are only going to come out with about 3000 dollars after closing cost and the real estate company takes there profit. If we reinvest the profit into the new house doing remodels will we have to pay a penalty? We live in louisiana.
Related Articles
Random Questions
- Discover Card Charge-Off from 2011As the title says, I had a Discover card charge-off in 2011 with a charge-off balance of $ 1850. Instead of taking a settlement, I was able to pay it in full last month (May …
- Cap1 Secure Card on Friday the 13thSupper Stoked! Got a $ 200 secure card with $ 49 deposit. Made my deposit and card shuold now be on its way. Hope it is reporting to Bureurs by 2016!! Small steps forward! …
- APPROVED!!!Received notification about 30 minutes ago that my loan is approved! All I need to provide prior to closing is a copy of a March pay stub but that is it. My closing date was …
- 4K Apartment Judgement..pay off or not before mortgage app?I have a 4K judgement from 2010 in NC from an apartment where i had to break the lease. Since then, I have finished school and recently married. We are trying to apply for a …
- Thanks!Thanks all!
Random Posts
- Is there any reputable mortgage companies that will refinance people with not good credit?My husband and I are so tired of dealing with shady refinance people. We know that our credit is not good (550’s) but is there anyway we can still get a halfway decent refinance? We …
- Loan Closer Bank of America?What experience is needed to be a Loan Closer w/ Bank of America. I’m trying to get the job through a temp agency. I have 5 ys exp as a bank teller (customer service). The …
- Can I get a mortgage without credit history?so i want to buy a house….one day…. is there any way to not have credit cards, but still somehow get a credit history and therefore a credit rating towards a mortgage?
- Where to insure foreclosed property?I am paying cash for a foreclosed property that I am buying from a bank. It needs repairs. During the repairs, this investment property will remain vacant. I wonder where to find appropriate insurance?
- Would we be entitled to a mortgage?I wonder if my family could qualify for a mortgage. Currently I am a stay at home but have a savings of about $ 30 000 that I received from the estate. My finance jobs. …
Random Topics
- Best way to resolve this Collections issueI just checked my TU report and its showing a collections from a tollway that was sent to NCO Financial. I called NCO, intending to attempt a pfd, the person said that I can’t resolve …
- Crazy scores and confused just where I’m at!I have been working on cleaning up my credit the best I can for a few years now. Problem is my credit is very limited to begin with, so the things that do show up …
- Do I have to go into an tax office to get the housing credit?Or can I do it online at Turbotax. I bought a house Nov. 10 and I wanted the quickest easiet way to get my money back. I just became unemployed so I really need the …
- what affects your credit score the length of time things are on your credit, or the amount?thats one thing that has baffled me for a while….
- How do I sue neighbor for water damage, he lives out of state?During the summer my basement flooded for a full week! At first I thought it was the water heater, then found water was coming in from the outside. I filed a claim with the city …
In the majority of states there is a “2 year rule” and you will have to pay taxes since you sold your house before the 2 year mark.
No, there is no tax penalty, as such
What will happen is that you will not be eligible for the section 121 exemption for homeowners that have lived in the property 24 or more of the last 60 months ($ 250k for individuals, $ 500k for married couples).
You *MAY* be eligible to prorate the section 121 exemption but talk to your tax preparer for conditions (things like employer transfer, etcetera)
Since you kept it over 1 year, the tax, if present, should only be Long Term Capital Gains on the gross sales price, minus costs to sell, minus amount spent on improvements, minus the amount you paid, minus costs to purchase, minus unamortized loan costs. Doesn’t sound like that’s going to be very much money.
I’m surprised you’ll end up with any profit after the collapse in the market. Be happy about that! If you roll your money into a new house, you may be able to avoid tax penalties. But talk to a lawyer… NOT Yahoo! Answers.
You won’t owe penalties, as long as the tax on the profit is paid during the year the property was sold. In essence, it sounds like you would owe about $ 1,200 ($ 3000 profit * 40% capital gains tax rate) in addition to your normal income taxes.
Because you are planning to not reside in this property for 2 of the last 5 years, the profit from the sale will be taxable. This could be a killer, and be a lot more money in taxes if you previously took funds out of the home via second mortgage or refinancing with cash out.
Consult a CPA within your local community…