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Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by mathjak107
So if you are single and lived or owned your home for 1 year and it has been at least 1 year since you last claimed the exclusion, then you can claim 365/730 = ½ of the $250,000 limit. Therefore, the most that you can exclude is $125,000
True, you can use a portion of the 250 / 500k exclusion if your stay was less than 24 months.
You start a new 24 month clock each transaction, and cannot take more than one / 24 months (with exceptions... moving / commute change over 40 miles, having multiple births, medical necessity...)
as mentioned, a 1031 is for investment properties and must be done by a 3rd party and has strict rules on replacement properties and time frame. You can never touch / have access to those funds during the transactions
I was fully prepared to pay this tax but I just found out that I may have a way out.
Here is the background. Wife and I bought a house. We realized that we needed more space so we listed house in this crazy market and sold it. We bought it for $262k on 4-1-20. We sold it for $307k on 8-27-21. We thing took those proceeds and purchased another house on 8-31-21. As you can see, we owned the house for less than 2 yrs. However, 2 days after the sell, we used the proceeds to purchase another property.
I have not talk to a Tax lawyer yet. Who should I talk to about this? CPA?
Any experts in here? THanks.
Good try but no. You can only do 1031 exchanges for investment property.
That's for filing single. Filing married limit is $500 000. Plus, all repairs and add ons count towards the property base. So, if they bought it for $262K and invested $40K in improvements and repairs, and paid 6% to realtor, they had no gain and, actually, loss. What is tax deductible.
I don’t think you can deduct a loss on owner occupied real estate.
So if you are single and lived or owned your home for 1 year and it has been at least 1 year since you last claimed the exclusion, then you can claim 365/730 = ½ of the $250,000 limit. Therefore, the most that you can exclude is $125,000
Can you cite a source for this? I have never heard anything of the kind and can't find this anywhere.
You can deduct your costs, improvements and realtor commission.
Yes, to get to your adjusted basis, but if the bottom line is a loss, you can’t deduct.
Example: original purchase price $200,000, improvements and commissions $50,000 = $150,000 adjusted basis. If you then sell for $125,000, you can’t deduct your $25,000 loss.
I was fully prepared to pay this tax but I just found out that I may have a way out.
Here is the background. Wife and I bought a house. We realized that we needed more space so we listed house in this crazy market and sold it. We bought it for $262k on 4-1-20. We sold it for $307k on 8-27-21. We thing took those proceeds and purchased another house on 8-31-21. As you can see, we owned the house for less than 2 yrs. However, 2 days after the sell, we used the proceeds to purchase another property.
I have not talk to a Tax lawyer yet. Who should I talk to about this? CPA?
Any experts in here? THanks.
Here are the rules for any exclusion. You are not qualified for partial exclusion:
When you say you sold it for $307k, is that your net proceeds after commissions, escrow expense? You should have received a Net Proceeds final document from Escrow.
That's for filing single. Filing married limit is $500 000. Plus, all repairs and add ons count towards the property base. So, if they bought it for $262K and invested $40K in improvements and repairs, and paid 6% to realtor, they had no gain and, actually, loss. What is tax deductible.
Repairs don’t increase basis, and losses on personal use assets aren’t deductible.
Yes, to get to your adjusted basis, but if the bottom line is a loss, you can’t deduct.
Example: original purchase price $200,000, improvements and commissions $50,000 = $150,000 adjusted basis. If you then sell for $125,000, you can’t deduct your $25,000 loss.
Oh, geez, I’m all confused, they INCREASE your basis, but the bottom line is you can’t claim a loss on owner occupied real estate.
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