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Old 11-30-2017, 02:26 PM
 
Location: Olympia area
314 posts, read 96,116 times
Reputation: 631

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Quote:
Originally Posted by NYCresident2014 View Post
How much gain do you think you have on this house?

Think about every dollar you spent in closing costs to buy the house, and every dollar you'll have to spend in closing costs to sell the house- almost all increase your basis in the home. If you're telling me that you bought a house three years ago and that it has gone up in value so much that you still have a gain even after closing costs (and that the gain is enough to be so worked up about), then you're in the wrong line of work.
Good points, thanks. The government will find ways to gouge people regardless.
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Old 11-30-2017, 02:26 PM
 
Location: Saint John, IN
7,345 posts, read 1,869,023 times
Reputation: 7526
Quote:
Originally Posted by riggy_house View Post
Hi Jellybean50,

You may have already been aware, but If the bill passes in its current form this week, then hopefully you have owned your current home for less than 5 years or else you will be charged income tax for the sale of your home after the first of the year.


Nothing has passed yet; however, if it does there are A LOT of bad outcomes to this bill. It's supposed to help the middle class, but in reality all it's going to do is screw everyone!
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Old 11-30-2017, 02:32 PM
 
Location: Olympia area
314 posts, read 96,116 times
Reputation: 631
Quote:
Originally Posted by jerseyj View Post
I agree In our area pretty much no one will touch an "in need of updating" house. They have the money to pay for granite, stainless and hardwood and no inclination to suffer the reno.
If it were not for the contractor flipper businessmen those older homes would sit and deteriorate and just become neighbourhood eyesores.
I agree, flippers can help improve neighborhoods. They encourage lazy and unmotivated homeowners to move along, and turn an eyesore into a major improvement for resale. I would love to see 'we buy ugly houses' signs all over this area. Some of the houses are so bad it's surreal. They should be razed.
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Old 11-30-2017, 02:46 PM
 
Location: Central Mexico and Central Florida
4,258 posts, read 1,749,172 times
Reputation: 5872
Quote:
Originally Posted by NYCresident2014 View Post
How much gain do you think you have on this house?

Think about every dollar you spent in closing costs to buy the house, and every dollar you'll have to spend in closing costs to sell the house- almost all increase your basis in the home. If you're telling me that you bought a house three years ago and that it has gone up in value so much that you still have a gain even after closing costs (and that the gain is enough to be worried about), then you're in the wrong line of work.
I am a retired tax accountant so I know how to adjust my basis. We bought when FL real estate was just coming out of the recession....there were still a lot of foreclosures around. My net capital gain will be 100K. So 15K out the window thanks to this bill. To add insult to injury it will trigger an increase in our Medicare premiums for a year, to the tune of $160 a month.

As far as flippers, IMO flippers don't hold houses for over 2 years...they get in and they get out. I'd be OK if this law went to 3 out of 5 years, but 5 out of 8 years is too long in this day and age.
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Old 11-30-2017, 03:29 PM
 
216 posts, read 67,304 times
Reputation: 373
We bought our home in 2014 to be near an elderly parent who needed our assistance. He died in late 2015; it took over a year to settle his estate. We have no reason to keep this home now that he is gone and his estate is settled, but our options are to either keep the home until 2019 or sell and pay tax on a substantial capital gain.



You need to check to see if you fall under the hardship provision due to the fact that you moved to care for an elderly parent.
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Old 11-30-2017, 03:35 PM
 
Location: Central Mexico and Central Florida
4,258 posts, read 1,749,172 times
Reputation: 5872
Quote:
Originally Posted by little pink View Post
We bought our home in 2014 to be near an elderly parent who needed our assistance. He died in late 2015; it took over a year to settle his estate. We have no reason to keep this home now that he is gone and his estate is settled, but our options are to either keep the home until 2019 or sell and pay tax on a substantial capital gain.



You need to check to see if you fall under the hardship provision due to the fact that you moved to care for an elderly parent.
I checked. No dice. There is a provision if you MOVE in order to care for someone. And there is a provision under unforeseen circumstances for death, but the death has to be of a qualified individual...the taxpayer/spouse; a co-owner; someone who resided in the home. My FIL was neither a co-owner nor did he live in our home.
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Old 11-30-2017, 03:58 PM
 
Location: Columbia, SC
8,377 posts, read 16,446,547 times
Reputation: 5555
Quote:
Originally Posted by dothetwist View Post
I am a retired tax accountant so I know how to adjust my basis. We bought when FL real estate was just coming out of the recession....there were still a lot of foreclosures around. My net capital gain will be 100K. So 15K out the window thanks to this bill. To add insult to injury it will trigger an increase in our Medicare premiums for a year, to the tune of $160 a month.

As far as flippers, IMO flippers don't hold houses for over 2 years...they get in and they get out. I'd be OK if this law went to 3 out of 5 years, but 5 out of 8 years is too long in this day and age.
I actually thought the same thing, 3 of 5 is more reasonable. Anyway, I'm going to point out that you should look at the positive.You should consider yourself fortunate. You bought a house and after 3 years are walking away up $85,000 after expenses and taxes. I say congratulations rather than consolations.
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Old 11-30-2017, 04:18 PM
 
Location: Central Mexico and Central Florida
4,258 posts, read 1,749,172 times
Reputation: 5872
Quote:
Originally Posted by Brandon Hoffman View Post
I actually thought the same thing, 3 of 5 is more reasonable. Anyway, I'm going to point out that you should look at the positive.You should consider yourself fortunate. You bought a house and after 3 years are walking away up $85,000 after expenses and taxes. I say congratulations rather than consolations.
We do count our blessings. It's just that we planned to list it after the New Year. Then this tax bill comes out of no where. Timing!
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Old 11-30-2017, 06:40 PM
 
2,235 posts, read 800,158 times
Reputation: 4296
^^^ everything I do to my house I have a copy of the bill.

Quote:
Originally Posted by bpollen View Post
True. But it's a tax increase on the middle class, particularly seniors. They're aiming at baby boomers, to try to make up the huge deficit that's coming down the pike.

This is bad law. An older person who has lived in her home for 40 years needs to sell to downsize, but may have to pay a tax on that, like she's a business person? That's just wrong. And harmful. Because probably one of the reasons she's selling is to live on the money.
No, you only pay the tax if you live there LESS than 5 years. The situation you bring up here is not effected at all.

In my hood, the people who are flipping the most are the ones making millions on their home increase. So they are pocketing $500,00 K every 2 years. Tax free and paying taxes on the amount over that 500K.

We did it once ourself. When a home has a 7 figure increase, it isn't a home but an investment.

I don't get people being worried about paying taxes. Means you made money! You live in this country, you think the roads, police fire department schooling comes free?
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Old 11-30-2017, 08:31 PM
 
Location: San Diego / NWA
634 posts, read 312,525 times
Reputation: 850
Quote:
Originally Posted by dothetwist View Post
I am a retired tax accountant so I know how to adjust my basis. We bought when FL real estate was just coming out of the recession....there were still a lot of foreclosures around. My net capital gain will be 100K. So 15K out the window thanks to this bill. To add insult to injury it will trigger an increase in our Medicare premiums for a year, to the tune of $160 a month.

As far as flippers, IMO flippers don't hold houses for over 2 years...they get in and they get out. I'd be OK if this law went to 3 out of 5 years, but 5 out of 8 years is too long in this day and age.
Just be thankful that you will have a gain and a pretty nice one for a short period of home ownership.

I flipped a lot of houses from 06 to 15 and I didn't keep any of them for 2 years. I paid straight income tax on my profits and you know what, it was good so for those of you with gains think back to the great recession and be thankful
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