Hold on a second....Stephanie has it partially right.
For your home, if you purchased it in 2000 and sold it in July 2006, and lived in it from 2006 to June 2006, you can exclude $250,000 of gain on the sale. Since the home is only in your name, you only get to exclude the single/separate amount rather than the joint amount.
For your home with your husband, if he bought it in 2005 and sold it in Aug 2006, you can exclude a portion of the gain (subject to limitations). Unless your name was added to the deed of the house after you were married, then again, only the single/separate limit applies, not the joint limit. Since your husband did not meet the ownership and usage test of 2 years out of 5, normally he would not be able to exclude any of the gain. However, since the sale was necessitated by a job related move, you can prorate the gain exclusion. You would need to take a look at how many months he owned AND used the property from the time he purchased it to the time he sold it and then divide it by the total number of months in two year (technically, it should be prorated in days, although approximate months will be easier to calculate). Take that percentage and multiply it by the maximum gain exclusion of $250,000 and that will be the maximum amount of gain you can exclude. You cannot make a blanket statement that because you moved because of work, none of the gain is taxable because that is incorrect.
If you look at your fact pattern, house purchased in 2005, moved in July 2006, sold in August 2006, assuming that the home was purchased January 2005, the gain exclusion is calculated thusly:
18 months (Jan 05 - July 06) / 24 months x $250,000
So your maximum gain exclusion is $187,500. If he purchased the house in July 06, then the maximum exclusion is $125,000 (half of $250,000 since he only used it as his principal residence for one year). Any gain on the sale in excess of this amount is taxable as long term capital gains (since he owned the house for more than one year).I need help with sale of home, marriage %26amp; tax questions. Can you help?
THANKS SO MUCH!!
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if you lived in your home for 2 out of the past 5 years, then you can exclude up to $250,000 gain on the sale of your home from tax. the same goes for your husband. assuming you both sold your homes with less than $250,000 gain EACH, then the sales of your homes are not taxable events.
congratulations!
If you sell your home due to a job move, then you can still exclude some of the profit from taxes even if you don't meet the two-year rule. It doesn't matter that the job has anything to do with the government, that's the rule for all job-related moves. The tricky part will be that you have two home sales in the same year. I'd talk to a CPA about this, to see if there's any way for you to claim both. This might be a case where filing separately might benefit you,
I can help... I'm a CPA.. and do taxes for a lot of people/businesses in Real Estate.. you (owning a home as an individual) can sell a home for up to 250,000 and not suffer any tax liability. if the home was owned jointly, then you can sell it for 500,000 and not be taxed on the money.
if the sale, and new purchase was necessitated do to a transfer and move of more than 50 miles, whether govt or not.. then the sale is not taxable and the moving expenses are all a tax deduction.. including time that you might have gone to the new location to look for housing.
Does any of that make sense??
It does not matter if it was requested by the government. When you sell your home, the profit is taxable. However, you usually get a credit towards the taxes when you sell your primary residence and use that money to purchase a new primary residence.
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