“We bought a new condo a year and a half ago. We just had a baby and want to sell and get into a house. We’ll make 0K profit after expenses. My question is whether we must wait until the two year mark before we sell so that we can avoid paying taxes on our gain?”
***ANSWER:
Great question!
For the full exemption, you must own and live in your home as your “principal residence” for at least 2 of the past 5 years. There are exceptions in which you can get a partial tax exemption. These exceptions include certain unforeseen changes in job, health, finances, family status, or family responsibility (including multiple births or caring for a relative).
If you sell your condo now, you’ll pay up to 24.3% in taxes (15% fed & 9.3% Calif.) on your gain or profit. Many people confuse “profit” with “net”, but they’re not the same.
In most cases, here’s how you figure out your profit:
Sale Price
- Purchase Price
- Purchase Costs
- Improvements
- Selling Costs
————————
= PROFIT
If you need more info on whether you qualify for any of the exemptions, want to discuss selling your home, or have other questions, call or email me…
0 Responses
Stay in touch with the conversation, subscribe to the RSS feed for comments on this post.