Capital Gains and sell of home |
|
|
|
stiff_12
First Time Poster
Cash: $ 0.25
Posts: 1
Joined: 24 Aug 2005
|
Capital Gains and sell of home |
|
|
I have tried to read the IRS tax code and this very simple scenario is contradictary to me.
I am selling my condo after owning and living in it as my primary residence for the past year. I have not owned for two or more years so I know I will pay capital gains since I am selling it to move into a single family home. My question is at what capital gains rate will I be taxed?
In the IRS code some places look like they state I will pay 25% and some places make it sound like it is a long term investment if I have held it for more than a year so I am taxed at a 15% rate. Can some one please clear up this confusion for me.
Thanks
|
Wed Aug 24, 2005 12:45 am |
|
|
joseanes
Full Member
Cash: $ 10.20
Posts: 76
Joined: 30 Aug 2005
Location: Marlborough, MA |
Re: Capital Gains and sell of home |
|
|
quote: Originally posted by stiff_12
In the IRS code some places look like they state I will pay 25% and some places make it sound like it is a long term investment if I have held it for more than a year so I am taxed at a 15% rate. Can some one please clear up this confusion for me.
Longer than a year is a long term capital gain 15%
|
Wed Aug 31, 2005 6:12 pm |
|
|
KathMorgan
Member
Cash: $ 3.84
Posts: 19
Joined: 26 Apr 2005
|
Make sure you take advantage of all the ways to increase your basis and decrease your sales price. Any improvements made while you lived there and closing costs on purchase are some ways to increase the basis. Cloosing costs on sale and "fixing up expenses" for the sale reduce your sales price. Remeber the closer those two numbers are together the less tax you pay. Definately make sure you go over the 1 year mark and if you are anywhere close to the two year mark you may make more money to wait for the 2 year mark to pass before moving and selling. Nothing says you have to wait to buy the new house until the two year mark or until you sell the old house. So if that applies, go ahead and buy the new house and get any and all things done to it you want while waiting to move in. Depending on how much the condo has appreciated this could make a huge difference in taxes.
|
Wed Aug 31, 2005 6:25 pm |
|
|
|