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As I understand it you pay no Federal Income tax on a house I sell due to a one time exemption of $500,000. I will be selling my house soon but I have seen other houses I want to buy now. If I sell investments now to buy the houses I want I am sure those proceeds are taxable as income and capital gains. If I wait and use the proceeds from the sale of my existing house then there is no Federal tax liability. Is this correct?? I have missed some good houses waiting for my house to sell. I am retired and do not qualify for a mortgage probably but that is another question maybe someone can answer.
Sid
As I understand it, the $500K is not a one time thing (which I once thought as do you) but it is cumulative. Meaning one sale for $300K profit then another later on for $200K profit. Still $500K.
Now it can get tricky like how long lived in the house, married filing jointly, etc. so best check with your CPA as to what/how works for you.
It is not one time and it is not cumulative. The basic requirement is that the home must be your main home for at least any 2 out of the last 5 years. This can apply to as many homes as you want. A single person gets $250K capital gains exemption, $500K for a married couple filing a joint return.
Property (Basis, Sale of Home, etc.) (http://www.irs.gov/faqs/faq/0,,id=199598,00.html - broken link)
It is not one time and it is not cumulative. The basic requirement is that the home must be your main home for at least any 2 out of the last 5 years. This can apply to as many homes as you want. A single person gets $250K capital gains exemption, $500K for a married couple filing a joint return.
Property (Basis, Sale of Home, etc.) (http://www.irs.gov/faqs/faq/0,,id=199598,00.html - broken link)
Spot on. But yes, if you sell your other investments, you're going to pay capital gains taxes.
On another note, unless there is some poor credit history, just because you are retired is NOT a reason for not qualifying for a mortgage. We just qualified, and could have qualified using either husband's social security or my annual required minimum distribution from my IRA. And showing additional assets, (namely, the same IRA.)
One more thing - if the house isn't selling, it's probably priced too high.
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