Looking for some guidance on the profit made from selling a home. I understand that there are closing costs, fees for realtors and possibly repair costs associated with paying for when selling a home, but I am wondering the taxes associated with the profit made from selling the home.
If I don’t use the profit money to buy another property, does that money get taxed? If so, what is it in the state of Florida?
If it is your primary you lived in for at least 2 years, not a rental, section 121 exemption, tax free up to $250/500k single/married.
A rental, you pay cap gains and depreciation recapture.
A flip, ordinary income tax plus as/med.
Have you spoken to your accountant on selling a property - if you did speak with him, what did he say?
Your accountant will know all the information available
He will know if it is a personal residence and how much you can potentially exclude.
If it is an investment property - he will know the basis and estimate what the gain would be and any potential taxes.
He would also know what state the property is located in and estimate state income taxes.
He would also give you options such to defer/exclude the tax on sale(1031, qoz, 121)
Was this your primary home? Or an investment property?
I have a specific situation and cant find a answer that fit my complicated question.
Me and my husband bought a house in Austin TX on 2017 and lived there until August 2020. We had to move because of COVID-19 work relocation and got it rented for 9 months. We ended buying in the city that we moved and sold the Austin home on July 2020. Now heres de question, what will the IRS (Taxes) charge us for the capital gains if we had a homestead but the property was rented only for 9 months?
Thanks in advance
@Cecile Silver since you lived in the home for 2 years out of the last 5 years you are able to receive tax free gains up to $500,000 since you are married. It doesn't matter that you rented the house out for 9 months. So you now do not have any capital gains to declare.
@Tyler Harrel Also living in Florida has no bearing as FL is a state tax free state.
@Joe Scaparra Thanks so much we were so worried about the IRS taking a big cut just bc we made a mistake but we didn’t uffff!! Thanks again
@Tyler Harrel have you considered offering seller financing? You will typically get higher than market price as well as spread out the tax impact over a longer period of time.