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Posted by lls8000 on June 10, 2006, 3:47 pm
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I am selling a house that I have lived in for 20 months.
Obviously, I don't expect to gain anywhere near $250,000. I
understand that I'll need to pay capital gains. I was under
the impression that the $250,000 exemption was pro-rated by
month, but now I'm not finding anything to that effect on the
IRS web site. Are all gains taxable if the seller hasn't
lived in the property for 24 months?
I'll try to hold of on closing on the sale until I've owned
the property for 24 months, but I'll be more likely to sell
early, if I can pay tax on a smaller portion of the gain
versus the entire gain.
Thanks, LLS
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Posted by Harlan Lunsford on June 12, 2006, 8:40 pm
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lls8000 wrote:
> I am selling a house that I have lived in for 20 months.
> Obviously, I don't expect to gain anywhere near $250,000. I
> understand that I'll need to pay capital gains. I was under
> the impression that the $250,000 exemption was pro-rated by
> month, but now I'm not finding anything to that effect on the
> IRS web site. Are all gains taxable if the seller hasn't
> lived in the property for 24 months?
>
> I'll try to hold of on closing on the sale until I've owned
> the property for 24 months, but I'll be more likely to sell
> early, if I can pay tax on a smaller portion of the gain
> versus the entire gain.
You say just above "...until I've owned the property for 24
months,"
Remember, ownership is not enough. Residence is required.
ChEAr$,
Harlan Lunsford, EA n LA
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
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<< The Charter and the Guidelines for submitting >>
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<< Copyright (2006) - All rights reserved. >>
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Posted by Seth Breidbart on June 12, 2006, 8:40 pm
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> I am selling a house that I have lived in for 20 months.
> Obviously, I don't expect to gain anywhere near $250,000. I
> understand that I'll need to pay capital gains. I was under
> the impression that the $250,000 exemption was pro-rated by
> month, but now I'm not finding anything to that effect on the
> IRS web site. Are all gains taxable if the seller hasn't
> lived in the property for 24 months?
You get to pro-rate it _if_ the sale is for an acceptable
reason (there's a list of them, which I don't have
immediately available).
Seth
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
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Posted by Phil Marti on June 12, 2006, 8:40 pm
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> I am selling a house that I have lived in for 20 months.
> Obviously, I don't expect to gain anywhere near $250,000. I
> understand that I'll need to pay capital gains. I was under
> the impression that the $250,000 exemption was pro-rated by
> month, but now I'm not finding anything to that effect on the
> IRS web site. Are all gains taxable if the seller hasn't
> lived in the property for 24 months?
Yes, unless the sale is due to one of the special
circumstances that trigger a prorated exemption. See IRS
Publication 523.
--
Phil Marti
Clarksburg, MD
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
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<< The Charter and the Guidelines for submitting >>
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<< Copyright (2006) - All rights reserved. >>
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Posted by joetaxpayer on June 12, 2006, 8:59 pm
Please log in for more thread options lls8000 wrote:
> I am selling a house that I have lived in for 20 months.
> Obviously, I don't expect to gain anywhere near $250,000. I
> understand that I'll need to pay capital gains. I was under
> the impression that the $250,000 exemption was pro-rated by
> month, but now I'm not finding anything to that effect on the
> IRS web site. Are all gains taxable if the seller hasn't
> lived in the property for 24 months?
>
> I'll try to hold of on closing on the sale until I've owned
> the property for 24 months, but I'll be more likely to sell
> early, if I can pay tax on a smaller portion of the gain
> versus the entire gain.
The IRS web sight is pretty good with this information;
http://www.irs.gov/taxtopics/tc701.html
says;
To be eligible for an exclusion, your home must have been
owned by you and used as your main home for a period of at
least two years out of the five years prior to its sale or
exchange. The required two years of ownership and use during
the five year period ending on the date of sale do not have
to be continuous. You can meet the ownership and the use
tests during different two year periods. However, both tests
must be met during the five year period ending on the date
of the sale or exchange.
If you did not meet the ownership and use tests, or if
during the two year period ending on the date of the sale or
exchange you sold or exchanged another home at a gain and
excluded all or part of that gain, you may be allowed to
exclude the gain realized on the sale or exchange of your
home if:
* You sold or exchanged your home due to a change in place
of employment or health or unforeseen circumstances.
So, I hope this covers you. If not, you can figure out what
the sale will cost you, and negotiate for a delayed sale. It
would be a shame if a month cost you tens of thousands. A
buyer would probably be happy to help you out for a cut.
JOE
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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