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Question on selling a house

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  1. in4games in4games is offline

    Sanford, ME
    United States

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    Dec 31st, 2011 (12/31/2011 3:12am)

    I live in maine and my family sold a house for 87k. Was wondering if anyone knew how much tax we would have to pay to the governement for the sale. Or where to go to find it?

    thanks
     
  2. Moonlight Graham Moonlight Graham is offline

    PA
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    Dec 31st, 2011 (12/31/2011 3:15am) in reply to in4games

    I believe you get a $250k exemption on capital gains tax every two years. At least that was the law last year. If i assume there isn't any other capital gains for the year, then they would owe nothing, but still have to file.
    Edited By: Moonlight Graham Dec 31st, 2011 at 03:16 AM
  3. in4games in4games is offline

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    Dec 31st, 2011 (12/31/2011 3:18am) in reply to Moonlight Graham

    Is that the same story if it's a second house?
     
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  4. ntanygd760 ntanygd760 is offline

    Fort Drum, NY
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    Dec 31st, 2011 (12/31/2011 3:18am) in reply to in4games

    How much did they pay for it. Also I might be wrong but I thought they only don't pay the taxes if they use that money to buy another house within a year. I could easily be wrong though.
     
  5. Moonlight Graham Moonlight Graham is offline

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    Dec 31st, 2011 (12/31/2011 3:22am) in reply to in4games

     
    Originally Posted by in4games View Post

    Is that the same story if it's a second house?

    with in the last 2 years?
  6. in4games in4games is offline

    Sanford, ME
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    Dec 31st, 2011 (12/31/2011 3:28am) in reply to Moonlight Graham

    negative just found that 2 year stipulation. so does that mean the sale just falls under income for the year?
     
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  7. Moonlight Graham Moonlight Graham is offline

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    Dec 31st, 2011 (12/31/2011 3:32am) in reply to in4games

    I don't think so. I think it's free and clear... but paying an account $80-100 to file the return is prob worth it.
  8. in4games in4games is offline

    Sanford, ME
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    Dec 31st, 2011 (12/31/2011 3:36am) in reply to Moonlight Graham

    Sweet, thanks for the free info. Hoping that we don't get raped on taxes even though to some extent i'm sure we will.
     
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  9. ntanygd760 ntanygd760 is offline

    Fort Drum, NY
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    Dec 31st, 2011 (12/31/2011 3:57am) in reply to in4games

    my bad I think I might have been thinking if you sell a second home you own and then use the money to buy another property you are going to rent within the same year then you don't pay taxes on it.
     
  10. whitealroker whitealroker is offline looking for action in Vegas...

    Springfield, PA
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    Dec 31st, 2011 (12/31/2011 4:40am) in reply to ntanygd760

    PM Lizardboy's mom. She has a knack for knowing stuff like this.
  11. Ugot2BKddn Ugot2BKddn is offline

    Sterling, VA
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    Dec 31st, 2011 (12/31/2011 5:29am) in reply to whitealroker

    When you sell your primary residence, you can make up to $250,000 in profit if you're a single owner, twice that if you're married, and not owe any capital gains taxes.

    This is accomplished when you meet the IRS use and ownership tests: You own and live in the home for two out of the five years before the sale.

    Read more: Capital gains home-sale tax break a boon for owners http://www.bankrate.com/finance/real...#ixzz1i5TMBUDp

    If you do not meet the residency requirment (2 of the past 5 years) then, to determine the taxable amount, there are some calculations to be done.

    BASIS =Original Cost of the House
    PLUS + Cost of Capital Improvements (i.e. addition, new bath, kitchen, roof,fence..ets)
    EQUALS = Adjusted Cost Basis

    NET SALES PRICE (less expenses to sell..ie sales commissions, etc) Look at the HUD-1) MINUS ADJUSTED COST BASIS = AMOUNT SUBJECT TO TAX




    Edited By: Ugot2BKddn Dec 31st, 2011 at 05:36 AM
  12. in4games in4games is offline

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    Dec 31st, 2011 (12/31/2011 5:51am) in reply to Ugot2BKddn

    alright i'm gonna try and put it in my own words so that you can tell me i understand what your saying

    take very original cost of house (my grandmother lived in it for a long time then my mom put it in her name about 10 years ago)
    + any renovations or improvements that we've done or put into the house
    _____________________________________________
    which equals the adjusted cost basis



    then take what we sold the house for aka 87k
    _ the "adjusted cost basis"
    _______________________________________________
    which equals what we are likely to be taxed on.


    I think i got it. tell me if i messed it up i know i basically said what you said over again but had to put it in my own words to understand. If this is basically it i appreciate the help a ton.
     
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  13. BillMueller BillMueller is offline OT President

    Farmland, IN
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    Dec 31st, 2011 (12/31/2011 5:51am) in reply to in4games

    always love this time of year when the Plattsburgh Award hopefuls come out of the woodwork
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