Lionsjunkie 1 Posted August 23, 2006 Wife and I are considering selling our house shortly...we have been hear about 1 yr 3 months and would really like to capitalize on the crazy market here in SW Florida....since buying in last May we can probably clear 125-150K if we sold today. Do we need to stay the two years or what are the loopholes or ways around paying the capital gains...I fave heard all sorts of contradicting insight on this so I thought...who would know better than the Geeks. Any help would be appreciated.... Market is still holding strong right now but we don't want to chance the bottom falling out in 6 months or so... Share this post Link to post Share on other sites
IndyTom 0 Posted August 23, 2006 Wife and I are considering selling our house shortly...we have been hear about 1 yr 3 months and would really like to capitalize on the crazy market here in SW Florida....since buying in last May we can probably clear 125-150K if we sold today. Do we need to stay the two years or what are the loopholes or ways around paying the capital gains...I fave heard all sorts of contradicting insight on this so I thought...who would know better than the Geeks. Any help would be appreciated.... Market is still holding strong right now but we don't want to chance the bottom falling out in 6 months or so... If you stay in your home for 2 years - you are entitled to make up to a profit of 250K - otherwise, you will be hit with the capital gains tax. So - in short - sticking it out will save you a few thousand dollars not to mention it will take the Florida bubble a chance to burst over the next couple of years. Interest rates aren't going up quickly enough for you to offset this tax savings of 9 months. HTH Share this post Link to post Share on other sites
Lionsjunkie 1 Posted August 23, 2006 If you stay in your home for 2 years - you are entitled to make up to a profit of 250K - otherwise, you will be hit with the capital gains tax. So - in short - sticking it out will save you a few thousand dollars not to mention it will give the Florida bubble a chance to burst. Interest rates aren't going up quickly enough for you to offset this tax savings of 9 months. HTH Thanks...but what if we want out before the 2 years...there is plenty of good value out there right now as Investors are bailing on huge deposits and walking from these homes allowing builders to come down on their prices, essentially using the deposits as part of their profit margin. Share this post Link to post Share on other sites
IndyTom 0 Posted August 23, 2006 Thanks...but what if we want out before the 2 years...there is plenty of good value out there right now as Investors are bailing on huge deposits and walking from these homes allowing builders to come down on their prices, essentially using the deposits as part of their profit margin. The problem you have is that you are walking out of one highly appreciated home into another highly appreciated home. Your profit you made off of your home may be slashed once you pour that equity into your new home. If you are upgrading - than wait. If you are downgrading - than sell. My friend who lives in Clearwater is wanting to sell his home - rent an apartment for a year - than buy a new home - providing the bubble already burst by than - with his profit he made today. That way he is maximizing his profit of today's values - and hoping to buy a similar home a the "bottom basement" price of 12 months after he sells his home. It's kind of risky - and he is tossing money away on rent - but he feels the money saved will offset the rent bya mile. Share this post Link to post Share on other sites
avoiding injuries 1,652 Posted August 23, 2006 Do you need the equity in order to purchase a new home? Rent it out for a year/6 months. I look at owning a house as just locking into the market in your area. If other houses are selling for cheap, yours probably will to. Share this post Link to post Share on other sites
Lionsjunkie 1 Posted August 23, 2006 Selling our house and renting for a year is something we are seriously considering...end of 07 is when the market here is supposed to hit bottom(so the analysts say)....I'll be sick if we wait until June 1 to sell and we lose 40-50K in the next 6-7 months...could happen, hopefully not. We currently live just N of Naples and are looking to move a little more N where the value in homes drops significantly. Yes, we will need that equity to buy another home down here....focken expensive place to live Share this post Link to post Share on other sites
Phurfur 70 Posted August 23, 2006 If you sell your primary residence and reinvest the money in another primary residence (there is a time limit) you are exempt from capital gains taxes. I am not sure of all the details but I would check that angle out. Share this post Link to post Share on other sites
Lionsjunkie 1 Posted August 23, 2006 If you sell your primary residence and reinvest the money in another primary residence (there is a time limit) you are exempt from capital gains taxes. I am not sure of all the details but I would check that angle out. This is what I am after...I have been researching it but have yet to get a clear cut answer....it seems like it is one of those grey areas with lots of different parameters set up for each situation. The problem you have is that you are walking out of one highly appreciated home into another highly appreciated home. Your profit you made off of your home may be slashed once you pour that equity into your new home. Good point..we are aware of this but you can go about 20 miles N and get real nice houses for 300-350K...assuming I get 450K for ours, we will have made 135 to put down on a home in the 300-350 range. My job actually moved about 20 miles N so this is a good situation for us....want to sell, reap the profits ASAP and not pay Uncle Sam a penny for us lucking out on a wild market ride. Share this post Link to post Share on other sites
IndyTom 0 Posted August 23, 2006 This is what I am after...I have been researching it but have yet to get a clear cut answer....it seems like it is one of those grey areas with lots of different parameters set up for each situation. This should help... http://www.bankrate.com/brm/news/real-estate/20041018a1.asp Share this post Link to post Share on other sites
Phurfur 70 Posted August 23, 2006 This is what I am after...I have been researching it but have yet to get a clear cut answer....it seems like it is one of those grey areas with lots of different parameters set up for each situation. I would ask an Income Tax Accountant. Share this post Link to post Share on other sites
Lionsjunkie 1 Posted August 23, 2006 This should help... http://www.bankrate.com/brm/news/real-estate/20041018a1.asp Nice...thanks..will consult with a tax dude to make sure. Share this post Link to post Share on other sites
SeaMonkeyOfDeath 0 Posted August 23, 2006 Nice...thanks..will consult with a tax dude to make sure. The exclusion for a married couple is $500k. I've seen people take the position that it's prorated for the time in the house. In anycase you can do a like-kind exchange tax free. You need a Tax person... You can retain my services for $150/hr Share this post Link to post Share on other sites
nicewolf64 0 Posted August 23, 2006 I'd take Alexander with your first pick and trade your 2nd rounder............ wait, what???? Share this post Link to post Share on other sites
shasha 0 Posted August 23, 2006 Definitely do your research about reinvesting when selling a house after owning it for less than 2 years. I am pretty sure that even buying another primary residence does not exclude the profits from capitol gains, atleast that is what the IRS told me. There are always loopholes, but the common misconception is that this is the same as 'flipping' a house, but from what I was taught this is only in commercial real estate or rental properties, private dwellings are not exempt until 2 years. The $500K combined for you and your spouse is right. I don't have my books here at the house to verify, but be sure that you get the info from a reputable tax advisor. We just bought a house north of DC and I am not worried about the market here at all. They have somewhere between 6000-18000 new jobs opening up here in the area and the market was insane before interest rates went down and the increase hasn't done much to the market. There just isn't enough houses to support all of the jobs here, thus making it an ignorant market. And with gas prices increasing people aren't going to be driving from PA or WV to save a few bucks on their mortgage. Atleast that is what I am hoping. I know that I sure as hell wouldn't put 100 miles a day on my car when you really aren't saving anything. Share this post Link to post Share on other sites
FFOpie 0 Posted August 23, 2006 This is what I am after...I have been researching it but have yet to get a clear cut answer....it seems like it is one of those grey areas with lots of different parameters set up for each situation.Good point..we are aware of this but you can go about 20 miles N and get real nice houses for 300-350K...assuming I get 450K for ours, we will have made 135 to put down on a home in the 300-350 range. My job actually moved about 20 miles N so this is a good situation for us....want to sell, reap the profits ASAP and not pay Uncle Sam a penny for us lucking out on a wild market ride. I just happen to be.... a tax accountant First off, the reinvest gain thing went away years ago when they instituted the two year/ 250,000 per person exclusions. You have to be in that house AND use it as your residence for two years to get any exclusion. If it's one day less, your exclusion is zero unless you have what they call a qualifying circumstance. One qualifying circumstance that would allow you to pro-rate the exclusion would be if your job moved. Unfortunately for you, your new job has to be 50 miles from your original workplace. 20 isn't enough. Maybe you could get reloacted somewhere further? Another exclusion is for serious hardship, like you needed to move for medical reasons or to sell the house to pay medical bills. Worst case you pay long term CG rates of 15% on 100-130K which is a LOT less than you could lose if that market sours, which I think it's beginning to. You don't want to find yourself in a buyer's market 7-8 months from now just to try to save 10-12K. That's just my 2 cents though. Good Luck in any case. Share this post Link to post Share on other sites
Creepin'Camel-Toe 0 Posted August 23, 2006 Funny. My wife and I sold our house 2 years ago in West Palm Beach and moved to Colorado. We made 1-1/2 times more than we paid for it. I used the profits to buy/start my own business. (A Franchise) I was able to write it off and take a loss. There's nothing like working for yourself and get out of the working hive of business society. Great thing is I just a soon as the business was out of the red I got an SBA loan to payback the money the business needed to start. We used that as a down payment on a house here. Share this post Link to post Share on other sites
Brad GLuckman 519 Posted August 23, 2006 Divorce you wife Sell Your House Re-marry your wife Share this post Link to post Share on other sites
ieatchickens 0 Posted August 23, 2006 Heck I feel stupid. I thought this CAPITOL GAINS thread was about Portis and TJ Duckett! Share this post Link to post Share on other sites
IndyTom 0 Posted August 23, 2006 Heck I feel stupid. I thought this CAPITOL GAINS thread was about Portis and TJ Duckett! No - that is under the thread titled "Market Crash" Share this post Link to post Share on other sites
Let Da Big Dog Eat 42 Posted August 23, 2006 Altho this is not a topic for a FF bored, I will chime in. First, have your wife get some crappy office job, not Fast Food (I am asuming you are the primary wage earner) that is 50 miles N of where you are now. This will satisfy the 50 mile rule. She only needs to work there a month or 2. She needs to understand that her real wage is 10-12K + what she actually makes or she will give you Shiat, nothing is worth that. Do this right after you get the offer you want on your home to minimize her time there. Second, rent for 6 mths so it does not look like a sham trx. Third, don't do anything on a whim. Get a good tax guy and make sure you are right about the market. Last, draft a K in the first RD, the good ones go early. Share this post Link to post Share on other sites
FFOpie 0 Posted August 23, 2006 Divorce you wifeSell Your House Re-marry your wife lol Well divorce has been approved in some rulings by the IRS as what they call an "unforseen circumstance" allowing you to prorate the two year period but depending on who your wife is that may not be worth 10K to suggest doing either Altho this is not a topic for a FF bored, I will chime in. First, have your wife get some crappy office job, not Fast Food (I am asuming you are the primary wage earner) that is 50 miles N of where you are now. Technically, the new job has to be at least 50 miles further from your old house than your old job was from your old house. So if your job was was 10 miles away before, the new place has to be at least 60 to say you had to move because of it. Share this post Link to post Share on other sites
IndyTom 0 Posted August 23, 2006 depending on who your wife is... can size? sorry....just beating the other guys to the punch. Share this post Link to post Share on other sites
Creepin'Camel-Toe 0 Posted August 23, 2006 can size?sorry....just beating the other guys to the punch. Share this post Link to post Share on other sites
Let Da Big Dog Eat 42 Posted August 23, 2006 can size?sorry....just beating the other guys to the punch. Had to be asked. Sorry you beat me to it! Share this post Link to post Share on other sites
keeptwo 0 Posted August 23, 2006 Funny. My wife and I sold our house 2 years ago in West Palm Beach and moved to Colorado. We made 1-1/2 times more than we paid for it. I used the profits to buy/start my own business. (A Franchise) I was able to write it off and take a loss. There's nothing like working for yourself and get out of the working hive of business society. Great thing is I just a soon as the business was out of the red I got an SBA loan to payback the money the business needed to start. We used that as a down payment on a house here. You inadvertanly sold before the east coast,i trust you did'nt see it coming,stopped "flipping" and the west coast condo situation is becoming sluggish as well.The Florida boom ,been going there each winter,nothing fancy just for golf and family,has been incredible.Theres a new developement,stripmall etc...at every turn(i'm keeping tiki and drafting bush)Central Fl orlando in paticular yup i invested in a little bit has yet to hit the up-swing jmho Share this post Link to post Share on other sites
texasmouth 1 Posted August 23, 2006 Wife and I are considering selling our house shortly...we have been hear about 1 yr 3 months and would really like to capitalize on the crazy market here in SW Florida....since buying in last May we can probably clear 125-150K if we sold today. Do we need to stay the two years or what are the loopholes or ways around paying the capital gains...I fave heard all sorts of contradicting insight on this so I thought...who would know better than the Geeks. Any help would be appreciated.... Market is still holding strong right now but we don't want to chance the bottom falling out in 6 months or so... TAKE IT TO THE GEEK BORED YOU FOCKING ROOKIE! Share this post Link to post Share on other sites
Lionsjunkie 1 Posted August 23, 2006 can size?sorry....just beating the other guys to the punch. 34B....their real and they are spectacular TAKE IT TO THE GEEK BORED YOU FOCKING ROOKIE! Need to put the bong down ...thought I was in the geek room Share this post Link to post Share on other sites
16 and 33 0 Posted August 23, 2006 can size?sorry....just beating the other guys to the punch. TAKE IT TO THE GEEK BORED YOU FOCKING ROOKIE! 34B....their real and they are spectacular Need to put the bong down ...thought I was in the geek room OMG this is focking hilarious. Even if I didn't play FF in 4 leagues this place is classic! Share this post Link to post Share on other sites
gvn2fly 0 Posted August 23, 2006 The exclusion for a married couple is $500k. I've seen people take the position that it's prorated for the time in the house. In anycase you can do a like-kind exchange tax free. You need a Tax person... You can retain my services for $150/hr lots of malpractice on this board. glad you caught the 500k for married couples. proration can occur for a handful of reasons, including but not limited to: job transfer, significant life event (lots of gray area here) like kind exchanges, or 1031 Starker Exchange can take place tax free if it is a rental property, but not a primary residence. You could move out, rent it for a couple of months, sell it, buy another house, rent it out, and then eventually move in. That would suck, but it would work. Share this post Link to post Share on other sites
IndyTom 0 Posted August 23, 2006 Had to be asked. Sorry you beat me to it! I saw you lurking and had to take the plunge. Share this post Link to post Share on other sites
gvn2fly 0 Posted August 24, 2006 ffopie beat me to it. long thread, didn't have the time to scroll through. ------------------- changed my handle when my league-mates showed up here...the cheating bastards. Share this post Link to post Share on other sites
