I know that I need to consult a CPA, and I will, but if someone could shed some light on my options here that would be great.
I bought a lot and started to build a home on it. I had the intention of moving in, but things changed and I plan to move into a different home instead, 35 miles from the one I am building. The home is nearing completion and I am about to list it for sale. I have not and will not be living in the home.
It cost me about $350k to build and I expect to get $550k for it after realtor fees. So my question is how much tax will I have to pay on that $200k profit? Will it be short term capital gains (and if so, what %), or will it be counted as regular income (and therefore my tax would be 200k plus my regular salary, which is 50k?)?
I've tried to find the answer in IRS publication 523, but haven't had luck yet.
I'm wondering if there is any way to save on taxes because I am moving over 30 miles away.. maybe call it a job change or something?
Oh, and I should add this piece of information. I bought the land in May 2005 and plan to sell the finished home in January 2007. So does this make it long term or short term capital gains?
I understand u r situation. There are lots of sites online to provide you with quick assistance. but before approaching them check whether that site is genuine or not me familiar with some, one of the site that provides information for assistance in tax related information is www.havenexchange.com
This transaction will not qualify for 1031 exchange treatment. The investor never had the intent to hold the property for investment purposes, so it will not qualify.