Aces High Bulletin Board
General Forums => The O' Club => Topic started by: rabbidrabbit on November 28, 2005, 09:15:45 PM
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Will need to move next year and this is our first house. If I remember properly we get a 250k exemption per person on capital gains. However, we must make a lateral shift and reinvest the profits in a new house or pay taxes on gains. Is this correct?
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Originally posted by rabbidrabbit
Will need to move next year and this is our first house. If I remember properly we get a 250k exemption per person on capital gains. However, we must make a lateral shift and reinvest the profits in a new house or pay taxes on gains. Is this correct?
It just so happens I'm moving TO Texas in March.....where you moving from?
I don't know the answer, I don't understand the taxes that I pay, I just pay them....pretty sad, I know.
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Seattle..
Its good to know the rules since stupid mistakes can be costly. I'm just not sure if I remember them...>
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Originally posted by rabbidrabbit
Seattle..
Its good to know the rules since stupid mistakes can be costly. I'm just not sure if I remember them...>
you are moving TO seattle or FROM seattle?
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you asked me where I'm moving from... Seattle... don't know where I'm moving to until orders come in...
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Originally posted by rabbidrabbit
you asked me where I'm moving from... Seattle... don't know where I'm moving to until orders come in...
ahh gotcha. I got my orders a few months ago. My report no later than date is March 15th to Lackland AFB in San Antonio. I couldnt be happier with my orders.
IIRC there is new Federal laws that stipulate Active Duty don't pay Capital Gains taxes on houses sold up to 250,000. This is good for upto 4 years IIRC.
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No capital gains on 250k of gains or total sale price?
Fed law is 250k per person I think but the catch is you have to roll the profits into the next house or pay gains. Unless I'm wrong.. My situation is we will likely make 3-400K in profits on this house but I'm not sure we will want to be forced to roll all that into a new house. Would rather stay at the lower price point and not pay a mortgage at all.
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Originally posted by rabbidrabbit
No capital gains on 250k of gains or total sale price?
Fed law is 250k per person I think but the catch is you have to roll the profits into the next house or pay gains. Unless I'm wrong.. My situation is we will likely make 3-400K in profits on this house but I'm not sure we will want to be forced to roll all that into a new house. Would rather stay at the lower price point and not pay a mortgage at all.
honestly I'm a retard when it comes to tax law. What I was thinking of was actually an amendment to the SCRA involving "extended active duty" and the 3 year "use" law.
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Originally posted by rabbidrabbit
Will need to move next year and this is our first house. If I remember properly we get a 250k exemption per person on capital gains. However, we must make a lateral shift and reinvest the profits in a new house or pay taxes on gains. Is this correct?
cc, if the house was your principal residence for 2 years or longer. You can also take off all the costs of moving, new home, mortgage, loan, etc.
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but do we have to roll all the gains into the purchase of a new house?
If I remember right we can clear 250k per = 500k in profits tax free as long as we reinvest the gains into buying a new house. Any amount in profits not reinvested in a new principle residence is taxed as a lonf term capital gain. Am I right?
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Originally posted by rabbidrabbit
Am I right?
yes
For more information refer to: http://www.irs.gov/pub/irs-pdf/p523.pdf
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If you read the IRS publication it says new home has nothing to do with capital gain on sale of your current home.
Basically, lets say you purchased your current house for 100k. You're selling it for 400k.
Difference is 300K minus 250K tax exemptions (1 person) minus sale costs 25K(real estate agent fees, surveys, inspections, etc).
In that case your taxable amount is 25k.
As long as difference between sale and purchase is bellow 250k (or 500k if married), you don't have to worry about capital gain.
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Originally posted by rabbidrabbit
No capital gains on 250k of gains or total sale price?
Fed law is 250k per person I think but the catch is you have to roll the profits into the next house or pay gains. Unless I'm wrong.. My situation is we will likely make 3-400K in profits on this house but I'm not sure we will want to be forced to roll all that into a new house. Would rather stay at the lower price point and not pay a mortgage at all.
Hell if there was a base in Alabama that you could get orders to other than down in south alabama (Montgomery for the Air Force and Fort Rucker for Army) you could buy a huge house here in Birmingham with those profits and sit pretty with a super low mortgage payment.