If this was you personal residence, (defined by IRS as used as residence in 2 of the last five years - and can be any 24 months), then the capital gain is excluded (250,000 for single files and 500,000 fr those married filing jointly)
I would (1) be sure you don't close until it's been a fill two years and
(2) do you have the option of selling without selling them the furniture?
Mistake..It was purchased in August 2012....not 2011. We have owned the home for 10 months. It is personal residence.
That's too bad
let me see
lets do this ...
can you ballpark your taxable income (total)?
of course, if you could wait the additional 14 months that ONE consideration
We can sell without furniture but it will still only be less than 2 years. our taxable income is 50,676. No children. I assume the 28 percent bracket.
OK a couple of things ...
For those filing a married filing jointly return: here are the brackets
You're squarely in the 25% bracket .. now, ...
The new capital gains tax rates for 2013 and future years are as follows:
SO you DEFINITELY wan to wait until you've held the house for one year, so as to qualify for the long term capital gains rate, rather than it bieng taxed at ordinary income rates
Woops, so sorry
you ARE in the 15% bracket if you file jointly
you see what that means? (IF you sell after one year)?
If you wait, so that the sale happens after one year, so that you will have a long-term capital gain, rather than a short term gain, your capital gains rate is 0
This was made permanent as part of the American Taxpayer Relief Act (the fiscal cliff deal)
Still with me?
Okay...We can hold it for a year (Canadian buyers don't want to move in until December or so)...So when do the 2013 taxes take in effect? So it we wait until September 2013 (house was bought in August 2012) we will have a long term capital gains tax versus a short term capital gains tax and we will owe 0 percent capital gains. Is this correct, or am I just dreaming...
:) ... I just LOVE getting to give good news (so many times, in THIS are we have to deliver bad news)
No you are not dreaming
These laws ARE in effect, and will affect everything that happens in this tax year, 2013
Yeah!!!!! Wow, what a difference!! thank you!!!!
It all turns on being sure you have a greater than one year holding period
Be usre you look at your closing paperwork to pin down the date of sale, when you acquired
Thank you so much! We would normally wait two years but interest rates are climbing and we want to capitalize on that! Have a great day...
You too! Congratulations!
If this HAS helped, I would appreciate a feedback rating of 3 (OK) or better … That's the only way they will pay us here.
Your are sure we don't have to wait 2 years??
Also, you can save this (bookmark, save as a favorite) to come back for reference
Yes there are two different issues
(1) having the gain EXCLUDED by waiting two years
(2) having a zero capital gains rate for long term capital gains
here's what's important:
... Don't sell until after one year, so it qualifies as a LONG TERM capital gains (asset held for more than one year)
... Be sure that you file jointly tis year (when you do your 2013 taxes (by april of 2014)
sorry "This Year" ... meaning on your 2013 taxes due by Apr of 2014
So we are only paying tax on our income, essentially? I guess I am still a little confused about Zero capital gains tax versus excluded?
Taxable income must be below $72,500 ... kepping you in the 15% tax bracket or less (which is what determines that LONG TERM capital gains rate of zero)
again, just two different issues
All capital gains have a rate at which the tax is applied ... and for those in the regular income tax bracket of 15% or less that rate is zero
There is ANOTHER law that excludes ALL capital gains (regardless of income) is you lived in the home for two years
sorry "IF" you live in the home for two years (that one doesn't apply to your situation)
Okay...We always have a tax accountant for our taxes and they should know that.....I am assuming...Thank you so much. I will send this in with my taxes :)
I will make sure you are rated...Thanks again!!
But as long as you sell after holding for one year, the zero rate applies for you
whether its a house a stock or farm land (as long as it's long term) held for more than one year
yes, they'll know
Thanks so much
A year it is....Thanks!
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