Dave Buck <dbmonkey[at]elvis.com> wrote:

- quote -

I slightly "misspoke" in my message. When I referred to
"declining values," I meant that on more of a community wide
basis. For example, the neighborhood is going down hill and
you decide to get out NOW (rather than waiting 2 years) to
protect your profit.

As you note, the issue becomes "moot" if there is no taxable
gain. <g
MTW

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"MTW" <mtwingcpa[at]yahoo.com> wrote:

- quote -

If your home declines in value between the time you buy it
and the time you sell it, you don't owe capital gains tax on
it.

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Arthur L. Rubin <ronnirubin[at]sprintmail.com> wrote:

- quote -

It is interesting to note that none of the safe harbors in
the IRS regs appear to deal with what I would call the
"normal" risks of home ownership: declining value, changing
neighborhood, rising taxes, adverse zoning, obnoxious
neighbors, etc., etc. So, whether issues along those lines
will make it under a "facts and circumstances" analysis
remains to be seen. I would guess it to be a steeply uphill
battle at this point.

MTW

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Frank S. Duke, Jr. wrote:

- quote -

But would an unforseen change in the character of the
neighborhood count? (It didn't say "unforseeable". I
guess the IRS couldn't spell it, either!)

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- quote -

If you sell it before November 1, 2004, yes, unless there's
a special reason for selling. See IRS Publication 523 on
"reduced exclusion."

- quote -


- quote -

Gain times 15%

- quote -

Going to real estate agents for tax advice is a sure recipe
for disaster. Get Pub 523, which should answer your
questions. If it doesn't, come back for specific
clarification.

Phil Marti
Topeka, KS

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- quote -

Not if you wait until 31 October 2004 to sell it. By then,
you will have owned and lived in it 2 years.

- quote -

No.

- quote -

Yes. $0 if you wait until you have owned and lived in it 2 years.

- quote -

Usually only if your reason for selling is unforeseen
circumstances, health, change of employment, etc.
Unforeseen circumstances would not be, "I don't like the
neighborhood."

All freely provided advice guarantee correct or double your
money back

Frank S. Duke, Jr. CPA
Cincinnati, OH USA

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doug[at]pobox.com (Douglas Garstang) writes:

- quote -

It depends on when you sell. If you sell after Oct 31,
2004, the sale is completely ignored for tax purposes. If
you sell on or before Oct 31, 2004, the entire gain will be
taxed unless you moved because of certain job or health
reasons, or one of the reasons the IRS has defined as an
"unforseen circumstance". Moving "just because" isn't good
enough.

- quote -

Basically you figure out what tax bracket you'd be in not
counting the gain. If that bracket is the 10% or 15% one,
then your gain is taxed at 5% to the extent it falls into
the 10% and 15% brackets. The part of the gain falling
outside those brackets is taxed at 15%. If your bracket is
higher than 15%, the entire gain is taxed at 15%. The tax
forms will automatically take you through this.

- quote -

Yes. To get that exclusion you have to own and occupy the
property as your primary residence for any two of the five
years prior to the sale.

- quote -

No, it means the entire gain gets taxed. Unless, as
mentioned before, you moved for an allowable reason. If so,
then you can do the 3/4th proration you mention.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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I'm a bit thick when it comes to taxes, so apologies in
advance if this is a dumb question. I'd like to avoid paying
a CPA money if I get a simple answer.

Purchased a condo in California for $228,000 on Oct 31,
2002. Current approxmate sell value would be $334,000. Have
lived in the residence for the entire time I have owned it.

I'd like to sell. Will I pay capital gains tax? Is income
from my job somehow part of the calculation? Is there a
simple way for me to calculate the capital gains tax?
Everywhere I look, and every person I ask says something
different.

I heard the first $250,000 of profit is not taxable. Is this
assuming I've owned and lived in the residence for two
years? If I sell now, after 1.5 years, does that mean the
first 3/4 of $250,000 is not taxed?

Agents have told me I'd be walking away with about $100,000.

Thanks,
Doug.

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