Hello and thank you for using Just Answer,I assume the investment is no longer tax free (property tax etc) is that true? That is correct. If you move the money to something else the new investment will be subject to tax based on the investment.Will the money invested in real estate gain more value than sitting in an account earning 1%? That would depend on the investment and it's use. If rental then you may find the income to be more than the 1% but tax will be applied so that may cancel out any increase.
if I sell the house I am currently in and then invest some of the proceeds of that in an annuity account, is that taxable? If this has been your main home for 2 out of the last 5 years before you sale you would be allowed to exclude gain up to $250,000 but tax would apply to remaing gain
Or am I better off keeping the money in annuities and the like, and just selling my house and using that money to buy a new house? A more comprehensive evaluation by your financial advisor would be needed but I would leave the money in the annuities and use your main home to sale unless you anticipating getting more then $250,000 for the house then you have invested in it.
When you look to your investment in your home make sure you calculate your basis or cost correctly.
You said you are a widow, if you inherited your husband's portion when they passed then you did so at the amount that the house was worth when he passed.
To make it simple if you together purchased at $100,000 you each had $50,000 of basis. When he passed the house was worth $200,000. You inherited his half at $100,000 and your own basis of $50,000.
Now your basis is $150,000. If you sale for $300,000 you would have a gain of $150,000 but you can exclude that so you would not really owe tax on the sale.
I hope this information is helpful as you make your choices.
Hi Robin, This may also be a real estate question: The house I live in is paid for. I bought it after my husband died. I have lived in it for 2 years. If I buy the other house and move into it before I sell this one: Question 1: does the house I am buying qualify for a home loan or for an investment loan considering that at one point I may own two homes before the other one sells , and what if I decide to rent the original house out? Question # 2 is there a tax advantage to getting my real estate license and keeping one of the properties as an investment property and keep buying more properties as investments, as a business?