Bought a House in 2010

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At what rate would that $50,000 be taxed?

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I think it's tax as normal income.

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Paid $370,000 for it. Thinking about selling it in 2011. Put about $20,000 into for upgrades. If I sell it for $420,000, that would mean a $50,000 margin.

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You get to include the money you put in for improvements in your total investment so you would be looking at a $30k gain in this case not including purchase and selling costs.

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At what rate would that $50,000 be taxed?

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It would be taxed at the capital gains tax rate.

I'll add that I don't see you making a profit on the home in the current market but good luck.

For 2011, the short term rate (less than 1 year) is the equivalent of your individual tax rate. The long term rate is 15%.

best of luck with a 50k profit in one year in the housing market.

From IRS website minus the examples....Not sure what your situation is though.

Maximum Exclusion
You can exclude up to $250,000 of the gain on the sale of your main home if all of the following are true.
You meet the ownership test.
You meet the use test.

During the 2-year period ending on the date of the sale, you did not exclude gain from the sale of another home.

You may be able to exclude up to $500,000 of the gain on the sale of your main home if you are married and file a joint return and meet the requirements listed in the discussion of the special rules for joint returns, later, under Married Persons .
Ownership and Use Tests
To claim the exclusion, you must meet the ownership and use tests. This means that during the 5-year period ending on the date of the sale, you must have:
Owned the home for at least 2 years (the ownership test), and
Lived in the home as your main home for at least 2 years (the use test).
Exception. If you owned and lived in the property as your main home for less than 2 years, you can still claim an exclusion in some cases. The maximum amount you may be able to exclude will be reduced. See Reduced Maximum Exclusion , later.


Period of Ownership and Use
The required 2 years of ownership and use during the 5-year period ending on the date of the sale do not have to be continuous nor do they have to occur at the same time.

You meet the tests if you can show that you owned and lived in the property as your main home for either 24 full months or 730 days (365 × 2) during the 5-year period ending on the date of sale.

Temporary absence. Short temporary absences for vacations or other seasonal absences, even if you rent out the property during the absences, are counted as periods of use. The following examples assume that the reduced maximum exclusion (discussed later) does not apply to the sales.

Reduced Maximum Exclusion
If you fail to meet the requirements to qualify for the $250,000 or $500,000 exclusion, you may still qualify for a reduced exclusion. This applies to those who:

Fail to meet the ownership and use tests, or

Have used the exclusion within 2 years of selling their current home.

In both cases, to qualify for a reduced exclusion, the sale of your main home must be due to one of the following reasons.

A change in place of employment.

Health.

Unforeseen circumstances.

Unforeseen circumstances. The sale of your main home is because of an unforeseen circumstance if your primary reason for the sale is the occurrence of an event that you could not reasonably have anticipated before buying and occupying your main home

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$50,000

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After realtor fees and closing costs you'll clear ~20K.

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best of luck with a 50k profit in one year in the housing market.

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Yeah, where exactly is said house? Did he say?

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add to the fact that 20k spent on improvments mean nothing if your neighbors houses aren't selling.

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It certainly doesn't mean you can just tack that on to your purchase price and any and all potential buyers will just say "well of course, I now expect I will have to pay that on top of what you paid a year ago, in addition to the $50,000 additional gain you're looking to get."

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Let's just say I got a good deal on this place.

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That good deal was the market value for the house at the time of the sale.

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Uptown New Orleans housing market is doing just fine

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Uptown is down 2% y-o-y according to what I see online. You on the other hand feel your property has appreciated 9%-10% over the same period.

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Seems like you are remarkably ignorant of the basics for this to be true.

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no, sold house one in 2007 after I lived in it for 26 months. then sold house two in july 2010 after 3 years. so no taxes as I sold both for more than I purchased them for. $50,000 profit on house 1 and $10,000 on house 2.