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Capital gains question on real estate
Posted on 4/26/24 at 3:23 pm
Posted on 4/26/24 at 3:23 pm
Scenario:
Buy home for $100,000 and sell it five years later for $200,000.
Is the capital gains on $100,000 or is it $100,000 minus the closing costs of the buy and the sale? If I refinanced a home, does that money get reduced? What can reduce the gain?
Beg your pardons...this is a rental property.
Buy home for $100,000 and sell it five years later for $200,000.
Is the capital gains on $100,000 or is it $100,000 minus the closing costs of the buy and the sale? If I refinanced a home, does that money get reduced? What can reduce the gain?
Beg your pardons...this is a rental property.
This post was edited on 4/26/24 at 3:49 pm
4
Posted on 4/26/24 at 3:37 pm to rpg37
Was it a rental or your primary residence?
Posted on 4/26/24 at 3:41 pm to rpg37
quote:
Buy home for $100,000 and sell it five years later for $200,000.
If I remember right, and I'm sure we will have a CPA correct me, you pay nothing in capital gains if you've lived in the house 2 of the last 5yrs.
Posted on 4/26/24 at 3:52 pm to Lsut81
quote:
If I remember right, and I'm sure we will have a CPA correct me, you pay nothing in capital gains if you've lived in the house 2 of the last 5yrs.
I have had a CPA tell me the following of a home I have in Oxford, MS.
She said that if I buy a home and live there for five years, then make it a rental for five years, then move back into it for two years and sell, it is NOT excluded from capital gains. Is this not correct? She said I would be responsible for the gain divided by the number of years I lived there and then the recapture depreciation. It gets complicated.
Posted on 4/26/24 at 4:01 pm to rpg37
Frequency may be the culprit here.
Is this your first rodeo with renting a house?
If so, you need to visit with you cpa again - with the exact dates you:
Purchased the property
Day moved in
Day moved out
Started renting the property
Stopped renting the property
Day moved back in
Day house sold
Is this your first rodeo with renting a house?
If so, you need to visit with you cpa again - with the exact dates you:
Purchased the property
Day moved in
Day moved out
Started renting the property
Stopped renting the property
Day moved back in
Day house sold
Posted on 4/26/24 at 5:33 pm to KillTheGophers
If primary for 2 of the previous 5. But, if you deducted expenses asa rental it gets choppy.
This post was edited on 4/26/24 at 5:34 pm
Posted on 4/26/24 at 6:32 pm to Lsut81
If you are single, you get a 250k exemption on capital gains if you have lived in the house 2 of the last 5 years. 500k if you are married.
If the house went up more than your exemption, you still have to pay capital gains on anything over that amount.
If the house went up more than your exemption, you still have to pay capital gains on anything over that amount.
Posted on 4/26/24 at 6:47 pm to rpg37
1031
Posted on 4/26/24 at 8:59 pm to horsesandbulls
You can deduct any investment $ put towards it construction wise as well.
I'm selling 480. Owe 90k loan, 35k closing, and 120k invested into it all get deducted, for 235k gain. I'm just under it on my end
I'm selling 480. Owe 90k loan, 35k closing, and 120k invested into it all get deducted, for 235k gain. I'm just under it on my end
Posted on 4/26/24 at 9:08 pm to tgdk11
Yes, you increased your basis in the property.
Posted on 4/26/24 at 10:09 pm to Lsut81
quote:
I remember right, and I'm sure we will have a CPA correct me, you pay nothing in capital gains if you've lived in the house 2 of the last 5yrs.
There's an exemption amount. Also, if you live in it less than two years, you can prorate the exemption which still may cover the full capital gain.
Posted on 4/27/24 at 9:26 pm to rpg37
So what is a Section 121?
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