Tax situation
Just wondering where we stand on this...
We have a house in Houston that we have owned since '85 and lived in it until about three years ago. Did a lease/purchase on it. The people are not taking the option and have moved out. We now have the house in escrow selling to someone else. We will make approx. $55K on it. I am 57 and the wife is 55 years young. Are we going to be hit big on taxes? If so, what can we, or should we do? Thanx in advance...
Great Question.
I'll give this a shot.
I understand the Tax situation as such:
If you have lived in a home for Two out of Five years,
than you qualify for a 250K tax exclusion if single,
and 500k if married jiont return. I beleive this is as of
1997 Tax Law.
If one deosn't qualify for this situation than there
is the 1031 like kind exchange for "Investment Property".
It should be easy to have this info verified by a qualified
CPA or Accountant or Tax Attorney by a phone call which I recommend.
Hope this helps,
J
One more thought.
I wonder how "Depriciation Recaptored " might
come into play in your situation?
Perhaps a more experianced REI might be able to comment.
Thanks,
J
Thanx for the speedy response. That is the way I heard it also. The three years that we didn't live in it will be up on 15 Feb. Hopefully the house will close on the 15th of this month (Jan). So, if that is the case (2 yrs out of the last 5) we will just squeez in under that situation. Counting on the total to payoff some debt and finally start our investing career. Once again... Thanx.