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Old 02-10-2019, 06:05 AM   #41
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once upon a time, did the sellers have to be of a certain age to forego the capital gain, unless they plowed the money into another house?
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Old 02-10-2019, 08:26 AM   #42
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Not sure if it varies state to state or lawyer to lawyer, but we just sold our home last week.

The closing lawyer sent us a questionnaire we had to sign which provided a list of questions, it asked if we were single/married, would we make more than 250/500 from the sale, did we take a home office tax deduction, was it your primary residence 2 of the last 5 years. there may be others I can't remember and can't find it... basically it just asks all the tax questions up front, you sign, and the lawyers use that to decide whether to file a tax report or not.


Since my BF and I are not married, I filed mine as all nos so they will not file any tax records for me, my BF however did write off a home office deduction so they will file one for him as he will have to reconcile that on next years taxes.
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Old 02-10-2019, 08:36 AM   #43
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I have sold 3 homes since 1999 netting $200,000, $240,000, $250,000 and never had to report the sale or pay taxes on the gains. Hopefully, I can find another "Hot market" in the future?
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Old 02-10-2019, 10:58 AM   #44
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I have sold 3 homes since 1999 netting $200,000, $240,000, $250,000 and never had to report the sale or pay taxes on the gains. Hopefully, I can find another "Hot market" in the future?
If you're following the info in the thread, if you were married and the sale price was under $500,000, the sale does not need to be reported. Not sure what you mean by 'net' - net from the sale (sale price minus closing expenses/fees), or net gain (considering cost basis)?

If single, the $250,000 sale net applies.

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Old 02-10-2019, 11:50 AM   #45
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If you're following the info in the thread, if you were married and the sale price was under $500,000, the sale does not need to be reported. Not sure what you mean by 'net' - net from the sale (sale price minus closing expenses/fees), or net gain (considering cost basis)?

If single, the $250,000 sale net applies.

-ERD50
I was referring to "net gain" profit on sale. Never went over the $250,000 profit mark. Now, it does not matter as the property is overseas and not in my name and the taxing country does not tax capital gains on RE if you do not have multiple homes.
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Old 02-10-2019, 12:26 PM   #46
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I wonder how this will eventually work for me and several of my neighbors.

About 6 of us are living in our grandfathers' or great-grandfathers' houses. These homes haven't been in a public sale for over a century; just passed down and around with $1 transfers and/or trusts/inheritances over time.

Would the basis be the original public sale back in 1888 or the more recent 'purchase' ($1) or inheritance?

I never paid much attention but there is a possibility that DW and I will move/sell before we die.
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Old 02-10-2019, 02:27 PM   #47
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I wonder how this will eventually work for me and several of my neighbors.

About 6 of us are living in our grandfathers' or great-grandfathers' houses. These homes haven't been in a public sale for over a century; just passed down and around with $1 transfers and/or trusts/inheritances over time.

Would the basis be the original public sale back in 1888 or the more recent 'purchase' ($1) or inheritance?

I never paid much attention but there is a possibility that DW and I will move/sell before we die.
well if you bought it for $1, then your cost basis is $1, if you inherited it, you really should have had it appraised at that time so you can justify the value of it and then should have been able to use the value of it at that time as cost basis. Not exactly sure what happens when you don't have it appraised as it may become an issue proving stepped up value.
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Old 02-10-2019, 05:37 PM   #48
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I assume it doesn't matter if the title is in one name; as long as you are married that the $500K exemption applies.
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Old 02-10-2019, 05:56 PM   #49
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I wonder how this will eventually work for me and several of my neighbors.

About 6 of us are living in our grandfathers' or great-grandfathers' houses. These homes haven't been in a public sale for over a century; just passed down and around with $1 transfers and/or trusts/inheritances over time.

Would the basis be the original public sale back in 1888 or the more recent 'purchase' ($1) or inheritance?

I never paid much attention but there is a possibility that DW and I will move/sell before we die.
Not sure it really matters much if the cost basis is $1, or actual cost in 1888 . Basically the total value is capital gains

But as Karen said, there should be a stepped-up basis if the house was inherited.
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Old 02-11-2019, 04:13 AM   #50
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well if you bought it for $1, then your cost basis is $1, if you inherited it, you really should have had it appraised at that time so you can justify the value of it and then should have been able to use the value of it at that time as cost basis. Not exactly sure what happens when you don't have it appraised as it may become an issue proving stepped up value.
Perhaps a local property appraiser, with experience dating back to your inheritance date, would be able o estimate the value. Or not. A CPA or Tax Atty. should be able to figure it out.
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Old 02-11-2019, 08:01 AM   #51
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I believe there are forensic financial professionals that could get an estimated stepped-up cost basis for the date you inherited the house, if that was how you got it. If actually sold, then as stated the cost basis is what you bought it for; even if that was $1.
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Old 02-11-2019, 11:09 AM   #52
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I assume it doesn't matter if the title is in one name; as long as you are married that the $500K exemption applies.
Correct. That was our situation.
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Old 02-11-2019, 11:33 AM   #53
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I guess if the home sells for less than $250K or $500K the realtor does not have to report anything? Otherwise they do?
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Old 02-11-2019, 11:54 AM   #54
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This article does not say anything about the original purchase price or the value of the home at the time of sale. Simply defines capital gains on a primary residence. Must be lived in 2 of the last 5 years. Based on this, if I bought a $600,000 home and sold it for $1,100,00 and am married, the appreciation of $500,000 is tax free.

https://www.investopedia.com/ask/ans...inhomesale.asp
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Old 02-11-2019, 12:44 PM   #55
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I guess if the home sells for less than $250K or $500K the realtor does not have to report anything? Otherwise they do?
It is not that simple, which is why closing lawyers may have you fill out paperwork to determine to report or not or just automatically report it and leave you deal with it come tax time.

You would still owe if you
A) didn't meet the 2 year mark
B) had it as a rental
C) used it in a home office write off
D) wasn't your primary residence

those 4 that come to mind very quickly where taxes would still be due for at least some of it.
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Old 02-11-2019, 01:34 PM   #56
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I guess if the home sells for less than $250K or $500K the realtor does not have to report anything? Otherwise they do?
I don't recall if it was reported (home sold for >$500K), but I don't think so.
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Old 02-11-2019, 04:52 PM   #57
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Back in early 2000s, recently married and tax preparer over at the house to get the papers to do taxes. I ask her after cursory glance, how does it look for my taxes? All's fine she says, except I'll owe capital gains on the house I recently sold.

I explained to her that there are no cap gains up to $250K. She and my newly attorney wife told me, the lowly appliance repairman, how wrong I was. Tax lady called me the next day and said I was right, but last time I hired her to do my taxes.
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Old 02-15-2019, 04:58 PM   #58
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well...this is my case... sold a home for $215K... the Title Company is the one that sent me the 1099-S and I input that into the Turbo Tax software... it also asked for the cost basis and that included all costs associated with the sale... and any improvements to the home... put that all in there and yes it was below the $500K... but it was required that it be input as again.. the Title Company sent me and the IRS the 1099-S... I would think some of my work buddies that think they can use their inflated homes as part of their retirement funds might be a little surprised when they have to pay taxes on their homes when they sell... its counted as earned income and yes it does mess with medicare MAGI... that number also gets shown on the summary page in Turbo Tax... need to pay attention to that number or your health care montly payments could go thru the roof...
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Old 02-15-2019, 06:08 PM   #59
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I'd presume that you can deduct the costs of selling (real estate agent's commission which can be quite substantial, closing costs paid by seller) and any capital improvements to the home (adding a deck or pool, finishing the basement etc).
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Old 02-16-2019, 10:25 AM   #60
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My accountant informed me that if you did capital improvements, like a roof, furnace etc. those can be added to the $500k tax free amount.



So if you and spouse sold for $550k and did $50k in improvements, i't's all tax free.
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