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#6
02-15-2004, 05:01 AM
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 Re: Capital Gains on Primary Residence if gain >$500k - quote - > > My wife and I just sold our primary residence of 6+ yrs with
Hopefully, you sold it after the 5th of May. Before that> > a capital gain of $1,073,000 (after adjusting for our cost > > basis incl. improvements, etc.). I understand that we can > > take advantage of the $500,000 exemption. My question is, > > can we somehow reduce, defer or avoid captial gains on the > > remaining $573,000 gain? > No, and forgive me for not losing any sleep over it. date, the tax would have been $114,600, after 5 May, only $85,950. Congress gave you $28,650 last year. Be thankful. All freely provided advice guarantee correct or double your money back Frank S. Duke, Jr. CPA Cincinnati, OH USA << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#5
02-11-2004, 02:56 PM
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| Re: Capital Gains on Primary Residence if gain >$500k Steve_DM wrote: - quote - > My wife and I just sold our primary residence of 6+ yrs with
There is no longer any way to defer the gain. Assuming you> a capital gain of $1,073,000 (after adjusting for our cost > basis incl. improvements, etc.). I understand that we can > take advantage of the $500,000 exemption. My question is, > can we somehow reduce, defer or avoid captial gains on the > remaining $573,000 gain? > We intend to rent relatively cheap for the next few years, > in hopes that the market might soften--and we'll buy in > again. If there's a sensible and compelling way to avoid the > $140,000 tax hit on the $573,000 capital gain, though, we're > open to buying a relatively inexpensive (~$650k) home in the > meantime. (I know there's some question about our logic, > since we're betting on the market softening--but my question > really is about the taxes.) never rented this property, I have no idea how you computed such a high rate of tax on a $573,000 gain. If the sale took place before 5/6/03 the max tax is 20%. If it took place after 5/5/03 the max tax is 15%. -- Alan http://taxtopics.net << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#4
02-11-2004, 01:58 PM
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| Re: Capital Gains on Primary Residence if gain >$500k - quote - > My wife and I just sold our primary residence of 6+ yrs with
Congratulations on your very wise investment and the> a capital gain of $1,073,000 (after adjusting for our cost > basis incl. improvements, etc.). I understand that we can > take advantage of the $500,000 exemption. My question is, > can we somehow reduce, defer or avoid captial gains on the > remaining $573,000 gain? > We intend to rent relatively cheap for the next few years, > in hopes that the market might soften--and we'll buy in > again. If there's a sensible and compelling way to avoid the > $140,000 tax hit on the $573,000 capital gain, though, we're > open to buying a relatively inexpensive (~$650k) home in the > meantime. (I know there's some question about our logic, > since we're betting on the market softening--but my question > really is about the taxes.) resulting profit! As you know you can exclude $500,000, but the remaining $573,000 will be taxed as long term capital gain. No way to defer the gain by buying another residence - that rule is gone. Mary Ann Thomas, EA in AZ << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#3
02-11-2004, 01:58 PM
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| Re: Capital Gains on Primary Residence if gain >$500k - quote - > My wife and I just sold our primary residence of 6+ yrs with
If you "just sold", that means you sold after May 5, 2003.> a capital gain of $1,073,000 (after adjusting for our cost > basis incl. improvements, etc.). I understand that we can > take advantage of the $500,000 exemption. My question is, > can we somehow reduce, defer or avoid captial gains on the > remaining $573,000 gain? > We intend to rent relatively cheap for the next few years, > in hopes that the market might soften--and we'll buy in > again. If there's a sensible and compelling way to avoid the > $140,000 tax hit on the $573,000 capital gain, though, we're > open to buying a relatively inexpensive (~$650k) home in the > meantime. (I know there's some question about our logic, > since we're betting on the market softening--but my question > really is about the taxes.) Congratulations! Your federal capital gains tax is $85,500 (15%), down from $11,460 (20%) for sales before that date. That's a lot better than the $140,000 you were concerned about. Of course, your state may want a piece of that also .... -- Don EA in Upstate NY << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#2
02-11-2004, 01:39 PM
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| Re: Capital Gains on Primary Residence if gain >$500k - quote - > My wife and I just sold our primary residence of 6+ yrs with
Nice problem to have. Sorry, but you have to bite the> a capital gain of $1,073,000 (after adjusting for our cost > basis incl. improvements, etc.). I understand that we can > take advantage of the $500,000 exemption. My question is, > can we somehow reduce, defer or avoid captial gains on the > remaining $573,000 gain? > We intend to rent relatively cheap for the next few years, > in hopes that the market might soften--and we'll buy in > again. If there's a sensible and compelling way to avoid the > $140,000 tax hit on the $573,000 capital gain, though, we're > open to buying a relatively inexpensive (~$650k) home in the > meantime. (I know there's some question about our logic, > since we're betting on the market softening--but my question > really is about the taxes.) bullet and pay on the gains. Helen, EA in PA Member of The Tax Gang Director, National Assoication of Enrolled Agents Immediate Past President, PA Society of Enrolled Agents << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#1
02-11-2004, 01:20 PM
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| Re: Capital Gains on Primary Residence if gain >$500k sdchap[at]ureach.com (Steve_DM) writes: - quote - > My wife and I just sold our primary residence of 6+ yrs with
No, there isn't, aside from offsetting it with capital> a capital gain of $1,073,000 (after adjusting for our cost > basis incl. improvements, etc.). I understand that we can > take advantage of the $500,000 exemption. My question is, > can we somehow reduce, defer or avoid captial gains on the > remaining $573,000 gain? losses from other sources (like stock sold at a loss and the like). - quote - > again. If there's a sensible and compelling way to avoid the
How do you figure that? The federal tax rate on capital> $140,000 tax hit on the $573,000 capital gain, though, we're gains is 15%, or about $86,000. -- Rich Carreiro rlcarr[at]animato.arlington.ma.us << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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02-11-2004, 01:01 PM
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| Re: Capital Gains on Primary Residence if gain >$500k sdchap[at]ureach.com (Steve_DM) writes: - quote - > My wife and I just sold our primary residence of 6+ yrs with
No, and forgive me for not losing any sleep over it.> a capital gain of $1,073,000 (after adjusting for our cost > basis incl. improvements, etc.). I understand that we can > take advantage of the $500,000 exemption. My question is, > can we somehow reduce, defer or avoid captial gains on the > remaining $573,000 gain? Phil Marti Topeka, KS << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#-1
02-10-2004, 07:26 PM
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| Capital Gains on Primary Residence if gain >$500k My wife and I just sold our primary residence of 6+ yrs with a capital gain of $1,073,000 (after adjusting for our cost basis incl. improvements, etc.). I understand that we can take advantage of the $500,000 exemption. My question is, can we somehow reduce, defer or avoid captial gains on the remaining $573,000 gain? We intend to rent relatively cheap for the next few years, in hopes that the market might soften--and we'll buy in again. If there's a sensible and compelling way to avoid the $140,000 tax hit on the $573,000 capital gain, though, we're open to buying a relatively inexpensive (~$650k) home in the meantime. (I know there's some question about our logic, since we're betting on the market softening--but my question really is about the taxes.) << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
| Tags |
| >$500k, capital, gain, gains, primary, residence |
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