Apopka, FL · Member since 2014 · 57 posts · 4 votes
I’m selling my primary residence (I’ve switch my primary residence Back and forth between my 2 Homes). After selling my home I should come out with about $80,000 I’m trying to avoid paying taxes what are some things I can do... I’m trying to keep the money on hand without having to roll the whole amount into another house
I don’t know if I’m reading into it wrong but I’ve read that if you are married and you sell you’re home for less than $250,000 you don’t have to pay taxes? My home is currently worth around $130,000 I owe $38,000.
Any advice is appreciated
Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
8y
@Logan Larochelle, if you can document you have lived in that home for 2 out of the 5 years immediately prior to its sale you can take the first $500K in profit tax free if your married. $250K if single.
You can do that once every 2 years per sec 121 of the IRS code.
Ultimately, everything you report on the return can be questioned by the IRS...will they... Your role is to report an accurate return based on the tax laws provided to us.
If the IRS questions anything you should say you are excluding the gain via section 121.
Show them the closing documents on the day you purchased the home and the closing documents when you sold the home. Then to show that you lived in the home for 2 years - show them the receipts of utilities that are in your name.
Likely they won't audit you - but in the chance that they do - you should at least have the documentation.
Specialist · Lakewood, CO · Member since 2014 · 1k+ posts · 1k+ votes
8y
@Logan Larochelle where were the taxes mailed? Were the utilities in your name? What did your driver's license say? Those are the ways you would show you lived there from a paperwork standpoint.