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Residence Sale After 15 Months
Q:
Subject: Sale of Primary Residence question
I’ve pulled some valuable information off your site, and I thank you.
One thing that is not clear to me ~ If I sell my primary home which I have owned and lived in just 15 months, (and never rented) ~ what taxes will I be subject to?
I would greatly appreciate your clarification. I understand what happens after two years, but it’s rather gray in that 1-2 year span.
Thank you,
A:
It all depends on why you are selling before you have been in the home for the full 24 months.
If you have a qualifying reason, then you would be entitled to exclude approximately $156,250 of profit ($250,000 / 24 X 15). Any profit above that would be taxed as long term capital gain.
If you don't have a qualifying reason for moving out so soon, all of your profit will be subject to taxation as long term capital gain.
What you do with the sales proceeds will have absolutely no effect on this issue.
You can see more on this on my website.
As always, you need to consult with a tax pro who can crunch your actual numbers to see how much, if any, tax you will have to pay on this sale.
Good luck.
Kerry Kerstetter
- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 8/10/2005 08:28:00 AM Send this post:
