I know you dont have to pay taxes if you lived in you home 2 out of the past 5 years if you sell but what about relocating? I sold my house in oct. 06 and didnt pay taxes cause i had lived there for 8 years we had planned on building and we moved into a townhouse after we sold our house… Plans changed and we ended up not building and we purchased our current home in june 08. Now we are moving 300miles away (we recently got hit by hurricane ike) and we are relocating. I was wondering if i will have to pay taxes on the profit when i sell my house or if there is something in the tax code about relocating?
maybe.
in your case, the joint $500,000 exclusion will be prorated for the time you lived in the home. There is a formula to calculate this that takes into account how long you lived there, when you sold the previous home, etc.
simple example: you lived there from June 01 to Dec 31. That’s 214 days. 214/730(2 years) =.29 x 500,000 = $145,000 of gain you could jointly exclude. your results will depend on your specific facts and circumstances.
I think the formula is in IRS publication 523.
If your just bought your house three months ago, how much sale profit will you have? Care to share some numbes?
If you get comps from three real estate agents in your area, you may find that there won’t be any profit to tax if you sell now.
I got a good deal when i bought my house and i did some light renovations. We just got hit by hurricane ike and the two cities next to me (Bridge city and Orange) got flooded pretty bad. All houses in bridge city got flooded and 1/3 of orange got flooded. There isnt alot out there right now cause everything got damaged and many people just want to buy a house that is fine they dont want to mess with trying to fix their home cause everybody is doing that and if your home flooded you could possibly be looking at it taking a few years before it is fixed and you can move back in.I am probably looking at 30000 to 40000 in profit.
Why are you planning to sell? Is there a job change, job transfer, health issue, divorce, or multiple pregnancy that dictates selling your house?
We are selling to get out of the area this is the 3rd hurricane in 4 years we have been hit with. I am also relocating because i am getting a better job. It is in the same industry i am in now but a salary increase and better benefits.