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      Question about living in your house 2 yrs.
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    Posted
    I know you need to live in your house 2 of the past 5 yrs in a home to not have to pay taxes. But what if you job transfers you when you have lived in your house only 1 yr and you have to move? Will you have to pay taxes on any of the money, all of the money, just the difference of what you paid to what you sold it for or what?

    Loves Tx
     
    Posts: 991 | Registered: Dec 07, 2003Reply With QuoteEdit or Delete MessageReport This Post
    Picture of rker321
    Posted Hide Post
    I think you mean taxes on what you sold your house for, minus what you bought it from.
    that is called capital gains.
    and yes you have to live at least two years before you can take all the exemptions that the tax law provides.
    I believe that is 325,000 per person.
    hopefully I have answered your question but a tax accountant will do a lot better.
     
    Posts: 671 | Registered: May 31, 2007Reply With QuoteEdit or Delete MessageReport This Post
    Posted Hide Post
    We lived in our home for 23 months before selling. Grrrr! Still, it was better to take the offer we received than hope we'd get another one a month later....
     
    Posts: 72 | Registered: Sep 29, 2007Reply With QuoteEdit or Delete MessageReport This Post
    Picture of berniek
    Posted Hide Post
    This is the guiding IRS Publication:
    http://www.irs.gov/publications/p523/ar02.html

    If there is a job transfer over a specific distance:

    "Employment.
    For this purpose, employment includes the start of work with a new employer or continuation of work with the same employer. It also includes the start or continuation of self-employment.

    Distance safe harbor.
    A change in place of employment is considered to be the reason you sold your home if:
    The change occurred during the period you owned and used the property as your main home, and

    The new place of employment is at least 50 miles farther from the home you sold than the former place of employment was (or, if there was no former place of employment, the distance between your new place of employment and the home sold is at least 50 miles).

    Example.

    Justin was unemployed and living in a townhouse in Florida that he had owned and used as his main home since 2006. He got a job in North Carolina and sold his townhouse in 2007. Because the distance between Justin's new place of employment and the home he sold is at least 50 miles, the sale satisfies the conditions of the distance safe harbor. Justin's sale of his home is considered to be because of a change in place of employment and he is entitled to a reduced maximum exclusion of gain from the sale."

    The capital gains exclusion is $250,000 for single, $500,000 for married couple.


    ***It's not my job to sell a house to my buyer, it's my job to find the right house for my buyer.***



     
    Posts: 2392 | Location: Colorado Springs, CO | Registered: Jan 18, 2003Reply With QuoteEdit or Delete MessageReport This Post
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