Capital Gains Tax
I am selling a house that is no longer my primary residence due to remarrying.
I want to sell it but will not be reinvesting in a like property. I expect to net 150k Will I owe capital gains tax. I am 54
Smacks of tax to me. Seek out your write offs, and enjoy the success.
In the meantime, did you live in the house within the last 5 years? I think that something like 2 out of the last 5 can be used as primary residence exchance. Is the house currently rented? Will you be using proceeds for purchase of new primary residence? If you lived there for 2 out of the last 5 years you can keep a bunch/all of the cash. At least, that would be my hopeful thinking out loud. Or maybe that only works if you move up in prop. Hmm.
Good luck[ Edited by noel2 on Date 09/03/2004 ]
How long did you live in the property? If you lived in the property for at least 24 months out of the last 60 months just prior to selling it you would qualify for your 121 exclusion (Section 121 of the Income Tax Code). It does not matter that you do not live there now, only that you lived there for at least the 24 months out of the last 60. The 121 exclusion would allow you to exclude up to $250K in capital gains tax as an individual (the amount you net has no bearing here, only the amount of your capital gain tax).
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Just to clarify Mr Exeter's response.
To qualify for the capital gains exclusion on the sale of your primary residence, your must meet TWO requirements (the two year rule): OWN the property at least two of the five years prior to the sale, and, OCCUPY the property as your primary residence at least two of the five years prior to the sale.
Failure to satisfy either the ownership or the occupancy requirement disqualifies you from the capital gains exclusion.
not entirely "newkid", the Law has been modified where the gains can now be prorated i.e. if you were not at that home for the full 2 years, you could still get back some tax free money through proration.
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The proration is not automatic. To qualify for the proration, there must be extenuating circumstances which force the sale of the primary residence such as job relocation, medical necessity, or unforeseen circumstances that create a financial hardship.
Getting married does not seem to meet any of these exceptions.