How can I avoid being taxed on the sale of my home?
February 18, 2004
Date: Sun, 11 Jan 2004
I have to thank you for taking the time to inform people on financial matters. Thank you. Now the reason why I am writing is because I have a question regarding taxes on the sale of a house. My wife and I just purchased a house in Olivehurst Ca. If we fix the house and decide to sell the house, is there a way we can shield the money from getting taxed heavily?
Thank you for your time.
Date: Mon, 02 Feb 2004
If you live in the home as your principal residence for more than two years, you can exclude up to $500,000 of gain. If the house is investment property, you could exchange up into another house. If you just want to sell the house after you hold it for more than a year, you should qualify for a 15% maximum federal tax rate (excluding any depreciation previously claimed.) You could spread the gain by carrying financing as an installment sale. As you can see, you have a lot of choices.
We have more answers to frequently asked real estate tax questions! We also offer up-to-date information about new tax real estate tax developments in Michael Gray, CPA's Real Estate Tax Letter.
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