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Capital gains anyone??

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  • tryinfr3rd tryinfr3rd's Avatar 05-17-07 | 12:15 PM
  • Some of you may remember dh and I have been in the process of building an investment house to resell hopefully for a profit
     
    well the house is done
     
    yay! and we are going to be listing it soon, my question is if any of you have any knowledge on capital gains taxes. I do plan to see an accountant but I just thought Id get some free info if anyone here had any to share
     
    Karen I know you know a lot about stuff like this....anyways my question is on (cant remember what its called in IRS terms) but when you re-invest your profits in like property to avoid capital gains...someone told me the other day you have to had declared you were going to reinvest before you finalized the purchase of the property to begin with, anyone know if that is true? I think also since we've owned this property for more than a year we pay a smaller percentage for capital gains...? It just makes me cringe how much money we are going to have to give the gov't when we pay c.g. but it would also be nice to have access to all the money right away too.....it gives me a headache thinking about all this sometimes.....anyways any advice/info is greatly appreciated!
     
  • addygirl addygirl's Avatar 05-17-07 | 12:45 PM

  •  


     


    Ok- don't quote me on any of this..
     


    I thought you have to have lived in the property as your PRIMARY residence for 2 years - one day past the 2 year mark (from closing date) minimum...to not have to pay them if you reinvest them. I think one of the articles linked above contradicts (sp) that.
     


    I have never heard of having to declare anything...who the heck would you declare this with?
     

     


    I'm still learning all this as we are kind of "flipping" new construction.
     


    Let us know what you find out FOR SURE.
     
  • Janine Janine's Avatar 05-17-07 | 02:32 PM
  • I have always heard the same thing about it being your primary residence for 2 years.....
  • Dopey406 Dopey406's Avatar 05-17-07 | 02:52 PM
  • I don't know anything about capital gains except the same 2-year rule that everyone else is talking about. Sorry I couldn't have been of more help.
     
  • tryinfr3rd tryinfr3rd's Avatar 05-18-07 | 12:51 PM
  • yeah the whole thing is totally confusing I swear, I know the IRS does it on purpose too!!!
     
    the 2 year thing you dont HAVE to re-invest it Im pretty certain, you dont have to pay capital gains at all as long as it was your primary residence for 2 years+ you can spend it however you like after that as long as your profit is under your yearly allowed gain *or whatever its called* (dont ask me what it is I think it goes by your income and deductions and etc) .....I do know there is one exception to that rule (well probably more but I know this one for sure) if you have to move because of work and you move more than 50 miles (I think its 50) away you dont have to pay capital gains (well as long as you dont make more than your "allowed" and etc) for having to sell your house and move closer to your new work even if its less than the 2years......Im pretty sure since we've owned it more than a year we get a lower percentage rate on the capital gains (I think we pay like 15% now as opposed to like 23% or something if we'd owned it less than a year) capital gains is just on your PROFIT I know that much for sure....I was wondering who you would "declare" it too as well, the IRS is the only place I could think of but who the heck knows
     
    I will be talking to an accountant soon so I'll let you guys know cause it is SO confusing like I said and I know a lot of people are flipping or building new like us and reselling so its good info to have.....I'll post after I find out for sure
     
    thanks anyways guys!
     



    ok edited to add, I went to one of the links and found this on the not having to pay capital gains on your primary residence of more than 2 years....

    "When you sell your primary residence, you can make up to $250,000 in profit if you're a single owner, twice that if you're married, and not owe any capital gains taxes. "

    Last edited by tryinfr3rd; 05-18-07 at 01:09 PM..

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