Posted by Hugh on May 12, 2004 at 24:48:16:
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Tax On Equity “Profit”? - Posted by Hugh
Posted by Hugh on May 11, 2004 at 21:26:21:
As I understand it, a single person is entitled to a tax-free equity “profit” of up to $250,000 on the sale of his/her personal residence.
My question is this: If this “profit” is over $250,000 — say it’s $300,000 — is there still a tax liabiliy on the excess ($50,000 in this example) if that money is used as a downpayment on a new personal residence?
If using the excess over $250,000 to buy a new house eliminates the tax, how long does one have after selling before the new house must be purchased?
---- Hugh
Re: Tax On Equity “Profit”? - Posted by JOHN K HASLACH, CPA MST
Posted by JOHN K HASLACH, CPA MST on May 12, 2004 at 13:52:51:
Couple things, it is the gain which is taxed, not the proceeds. Your gain is the sales price less the cost of sale, less your cost to purchase plus improvements.
Up to $500,000 of gain can be excluded if you are married and file a joint return.
Re: Tax On Equity - Posted by rfk
Posted by rfk on May 11, 2004 at 22:04:43:
If your gain is larger than your exclusion, you will have to report a gain. Should be given a 1099S, by issuing agency for the reported sale, regardless.
No postponing.
I beleive this is the case; don’t have full reference materials available right now.
rfk