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^^^ everything I do to my house I have a copy of the bill.
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?
peanut you are the kind of successful person I respect!! Patriotic and sense of duty to the success that our country's freedom has granted you. Wish there were more informed and successful folks like you running for office!
As I've said before - I agree that they should be grandfathering anyone who owned the home 2+ years as of the bill's signing into law.
At the same time, your situation is so completely unique, that we cannot make laws that apply to everyone trying to give you an exemption.
You bought the house to be close to an ill family member. It was very compassionate of you to spend that time with him. Surely, investment value wasn't the primary reason you moved there and bought a house.
Perhaps part of your reasoning was that you knew it would be for only a couple of years AND it was an area that was appreciating - regardless of how rapidly it was - and you would be able to sell at the right time and not lose money.
Whether your realized gain is eventually 10K or 200K, it's a gain. You're walking away from the situation in a relatively short period of time and coming out ahead. You're most likely just coming out 15% total LESS ahead than if the old exemption applied.
Dothetwist -
You can always have your CPA file a request to waiver the new rules. When we sold in 2005, our agent told us she was involved with a couple from France who were moving back to France. They ahd not live in their home the 2 years. And they were paying the tax of 33% on all gains since they weren't American citizens.
They had a 7+ figure gain. The CPA and my agent (who was french) had to go somewhere (maybe IRS office) and plead case.
While they ilved here, he got cancer and recovered.
Their CPA filed to have IRS waive taxes as he was treated for cancer while they were living here.
My agent told me they were wasting his time, my CPA said she would of told them she wouldn't of done it, but to some CPA's that $250.00 per hour is too good to pass up.
They did not get the waiver as they wre already living here when he got cancer. Case closed.
The point being for you is, you can always ask your CPA to request a hearing. You are in a mcuh better position than my example. If you can prove you moved to take care of your parent, aren't netting a 7 figure gain, and are US citizens, you might stand the chance.
I intend to file for a waiver (pro-rated) under Unforseen Circumstances. I am a (retired) CPA.
by the way, can you explain this to me/us:
Quote:
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.
is the actual gain going to cause this, or that it was less than the 5 years?
I'm sure I'm just confusing myself, since I've always rolled over the gain from personal residences into the new residence, nor has it ever exceeded the cap.
you also didn't plan to own the house 2 years, so you'd be paying ordinary income on any amount over 550K anyway.
That's true, I figured we'd be here around 16/18 months and could pro rate that time if my spouse wanted to move closer to his job. As it is, I hear every day how much he hates this area and would rather pay the government for ten years.
is the actual gain going to cause this, or that it was less than the 5 years?
I'm sure I'm just confusing myself, since I've always rolled over the gain from personal residences into the new residence, nor has it ever exceeded the cap.
That rollover rule was repealed years ago and replaced with the 2 out of 5 year rule, now heading to 5 out of 8 year rule.
Re: our Medicare premiums. They are based on income. It is a 2 year look-back for annual premiums. I tried to copy the chart at this link, but it got all chopped up. https://www.medicare.gov/your-medica...t-b-costs.html
ahhhh, so your gain will count as ordinary income since it will be less than 5 years.
I certainly sympathize, and wonder how many people would be affected by that. But I would also guess it's a very very small %. The vast majority of Medicare recipients, or any means-based test, wouldn't be touched by the new rule.
on the capital gains end, it was to be effective immediately, not even at later date of passage
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