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Mark D
Mark D, Enrolled Agent
Category: Tax
Satisfied Customers: 989
Experience:  MBA, EA, Specializing in Business and Individual Tax Returns and Issues
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I purchased a house that was repossessed for $10,000.00. I

Resolved Question:

I purchased a house that was repossessed for $10,000.00. I paid it off and took out a home equity line of credit to remodel. I am now selling the house but am not buying a new home at this point. How much tax will I have to pay on house when it is sold ? I have been told it is a percentage of the gain but what about the money it took to raise the value of the house?
Submitted: 4 years ago.
Category: Tax
Expert:  Mark D replied 4 years ago.
Freddygirl,

Was this primary personal house, or was this an investment property?

Regards,

Mark D
Customer: replied 4 years ago.
This was my first primary personal home.
Expert:  Mark D replied 4 years ago.
Freddygirl,

Did you live in the home for at least 2 of the previous 5 years? If not, why did you sell the place?

Regards,

Mark D
Customer: replied 4 years ago.
Yes, I have lived in the home for the last 20 years and am moving into my fiance's home.
Expert:  Mark D replied 4 years ago.
Freddygirl,

Unless you have otherwise sold a personal home within the past two years, you would be able to exclude up to $250K of capital gains under IRC Section 121. You would claim this exclusion on your Schedule D. Any excess gain would be taxed at long-term capital gains rates (max 15%). Please let me know if you have further questions.

Regards,

Mark D
Mark D, Enrolled Agent
Category: Tax
Satisfied Customers: 989
Experience: MBA, EA, Specializing in Business and Individual Tax Returns and Issues
Mark D and 6 other Tax Specialists are ready to help you

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