Capital Gaines
My family and I have lived in our home for 1.5 years and we are in escrow now to move to a different part of the state. Will we be liable for capital gaines and if so could there be any legal ways from not paying it. We will be investing 90 % of our equity in to our next property. We will live in the new house and have lived in this one the entire time.
Whether you can escape paying capital gains depends on why you are moving. If you are moving for a new job and the new job is more than 50 miles further than your current job from your current home (I think), you can sell before the 24 month occupancy requirement is met and exempt a pro-rated amount of the gain. That is, if you are a married couple, eligible for a 500K exemption, you can exempt 75% of 500K after 1.5 years (375K).
If you are moving for health reasons, same pro-rating percentages apply.
The amount of equity you invest or spend is immaterial.
the reason for the move is not my job although it is over 500 miles from our current address, and I do have employment lined up in the same field.
Thank you for your reply
I do feel comfortable in that, I am switching companies, it is over 50 miles, so everthing i have read and heard is that I will be exempt, also i read that on personal property where you live you do not need to report it??
could this be true?
Quote:
On 2005-05-16 16:20, throughtheveil wrote:
I do feel comfortable in that, I am switching companies, it is over 50 miles, so everthing i have read and heard is that I will be exempt, also i read that on personal property where you live you do not need to report it??
could this be true?
Not totally correct. Reported if you sell at a gain. Not reported if sold at a loss.
I am in the same position. However I sold about 18months just moved into a bigger home. What are ways I can reduce my capital gains taxes. Any suggestions.
So were you living in the property before and/or after it was rented out. If you were living there you should be ok as far as capital gains. You have to live in the property for 2 of the last 5 years to avoid paying capital gains. It does not have to be 2 consecutive years.