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Posted by postacct on July 8, 2008, 1:10 pm
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I'm going to be buying a new house. If I can't sell the house I have
now before I buy the new one, will there be a capital gain when I
eventually do sell the current house? And if so, to avoid that, could
the new house be titled in someone else's name until I sell the
current house, then quit claim the new house to me?
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Posted by Arthur Kamlet on July 8, 2008, 1:23 pm
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>I'm going to be buying a new house. If I can't sell the house I have
>now before I buy the new one, will there be a capital gain when I
>eventually do sell the current house? And if so, to avoid that, could
>the new house be titled in someone else's name until I sell the
>current house, then quit claim the new house to me?
The law you seem to be remembering was changed more than eleven years ago.
You no longer have to buy a replacement house.
If you owned and lived in this house as your main home for
at least two of the five years before sale, you can exclude the first
$250,000 of gain. If filing jointly, your spouse may be able to do the
same.
If this does not meet your circumstances, please write back
with more informaion.
--
ArtKamlet at a o l dot c o m Columbus OH K2PZH
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<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Bill on July 8, 2008, 1:27 pm
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postacct@ymail.com posted;
>I'm going to be buying a new house. If I can't
>sell the house I have now before I buy the new
>one, will there be a capital gain when I
>eventually do sell the current house? And if
>so, to avoid that, could the new house be titled
>in someone else's name until I sell the current
>house, then quit claim the new house to me?
Not to worry. You will have three years from the date you move out of
your current home, during which the sale will be free of any "capital
gains tax" up to the limit of $250,000 ($500,000 if MFJ).
This tax break is offered to anyone who has lived in a residence as
their "main home" for 2 of the last 5 years. So long as you meet that
standard, it doesn't matter when you buy the new house -- or if you buy
another house at all.
The first $250,000 (or $500,000 if MFJ) will be free of taxes. Better
yet, you don't even have to mention the sale on your return. Just keep
your own records handy, in the event there's ever an inquiry. (Some
firms which handle closings have been known to issue 1099s for the
amount of the sale -- and this _may_ trigger an automatic letter
"inquiry" from IRS. If this ever happens, all you would have to do is
write a reply explaining the "income report" was a result of the sale of
your main home in which you had lived for at least 2 years, and within
the 5 years preceding the sale. That'll satisfy the IRS -- but it's
nice to have written records, including utility receipts, RE tax
receipts, etc.)
Bill
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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