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Really specific tax question

behsco90behsco90 member
100 Love Its Third Anniversary 100 Comments Name Dropper
in Chit Chat
Not sure if anyone here knows the answer to this, but I figured I'd ask here first before I pay someone to give me the answer....

I closed on my condo June 2013, so I have not owned it quite two years yet.  If I sell my condo and it closes before the 2 year mark, do I basically have to pay the full taxes on my "profit" or is it prorated?  Also how is it taxed? Similar to income tax, so if my profit is say $50k, then I pay taxes based on my income being $50k (plus my regular yearly income)?

I am really hoping I can sell it after my 2 years, but it's possible our HOA may go into litigation, then I'm stuck with cash buyers only....

I've googled this but have not found a complete clear answer. Thanks ladies!
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Re: Really specific tax question

  • photokittyphotokitty mod
    Moderator Knottie Warrior 5000 Comments 500 Love Its
    This should answer your question, page 10 & 11 in particular.
    http://www.irs.gov/pub/irs-pdf/p523.pdf
    :kiss: ~xoxo~ :kiss:

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  • behsco90behsco90 member
    100 Love Its Third Anniversary 100 Comments Name Dropper
    Thanks @photokitty, now I just have to figure out how much I'll have to pay.
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  • jenna8984jenna8984 member
    5000 Comments Fifth Anniversary 500 Love Its First Answer
    I'm 98% sure that home sales can make up to 250k profit before being taxed. You make a chart of costs- what you paid for the property plus any improvements- that is your basis. f you sell for 50k above that basis there is no tax. If you sell fo 251k above that basis, you pay tax on the 1k.

                                                                     

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  • photokittyphotokitty mod
    Moderator Knottie Warrior 5000 Comments 500 Love Its
    jenna8984 said:

    I'm 98% sure that home sales can make up to 250k profit before being taxed. You make a chart of costs- what you paid for the property plus any improvements- that is your basis. f you sell for 50k above that basis there is no tax. If you sell of 251k above that basis, you pay tax on the 1k.

    Only if you live in the residence for 24 months out of 5 years or meet other specific guidelines - that IRS sheet goes over it all. Fun stuff :\
    :kiss: ~xoxo~ :kiss:

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  • jenna8984jenna8984 member
    5000 Comments Fifth Anniversary 500 Love Its First Answer
    Example- if you bought it for 100k and put 20k worth of updates like a new kitchen, then your cost basis is 120k. You can then sell for up to 370k before you are taxed.

                                                                     

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  • jenna8984jenna8984 member
    5000 Comments Fifth Anniversary 500 Love Its First Answer
    photokitty said:

    jenna8984 said:

    I'm 98% sure that home sales can make up to 250k profit before being taxed. You make a chart of costs- what you paid for the property plus any improvements- that is your basis. f you sell for 50k above that basis there is no tax. If you sell of 251k above that basis, you pay tax on the 1k.

    Only if you live in the residence for 24 months out of 5 years or meet other specific guidelines - that IRS sheet goes over it all. Fun stuff :\
    oh, good call, I didn't know there was a time statute

                                                                     

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