- quote -

As others have hinted at, take a close look at the word
"profit." After 7 years, I think you mean "selling price
greater than $250,000," not profit. I'm quite sure you won't
owe any tax on this sale.Will

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"scotts." <75270_3703a[at]csi.xcom> wrote:
- quote -

Did you come out of the property with more money than you
put into it? If yes, then you're wrong, and its real
income. That you decide to buy another equally expensive
property is not part of that equation.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Your effective tax is likely to be very low compared to
other taxes. Even with 15% long term gain beyond the
exclusion, overall it may only be 5-10%. Though its still
lost money, its not very high.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Dick Adams wrote:
- quote -

Well, actually, 15% from May 5(?), 2003 through 2008.

- quote -

It was allowed -- it's just that the $250,000 exemption
wasn't allowed on a deemed sale. Neither was the
small business stock exemption.

Now, a sale to a related entity which is not considered
an alter ego.....

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

David Woods <dwoods[at]woods-financial.com> wrote in

- quote -

If you are intending to buy real property in the same market,
the income is phantom, and the tax is an expense.

scott s.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"Mike" <dontspamthecat[at]boo.ya> wrote:

- quote -

Yes.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"Mike" <dontspamthecat[at]boo.ya> wrote:

- quote -

Yes.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"Mike" <dontspamthecat[at]boo.ya> wrote:

- quote -

Yes.

- quote -

You can't sell a property to yourself and artificially raise
your basis without recognizing gain. Most people would be
happy about not having to pay tax on $250k of income.....

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"Mike" <dontspamthecat[at]boo.ya> wrote

- quote -

Yes, the gain above $250,000 will be taxed, but at 15% not
20%. And it makes no difference whatsoever that you plan to
buy another residence. I do not see why you consider it a
ripoff. You could NOT have retitled it to sell it to
yourself like you suggest. Where did you get that idea?
You should be happy that you have $250,000 that you don't
have to pay taxes on, rather than thinking you are being
ripped off! $250,000 tax-free income earned in 7 years time
is a darn good rate of return!

Vida Freeman, EA

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Mike <dontspamthecat[at]boo.ya> wrote:

- quote -

Possibly in Pub 523, which details the law on home sales?

- quote -

Correct, except the current LTCG rate is 15% maximum.

- quote -

What you do with the money is irrelevant. Being able to
defer the gain into a new house went away, with the tax law
changes, in May 1997.

- quote -

For sure. Make sure that you have calculated your "gain" correctly,
and made any appropriate adjustments to your "cost basis". Add your
selling expenses (including real estate commissions) to further
increase your cost basis.

- quote -

I think you are delusional, as retitling the house to
yourself is not a sale and would not lead to any capital
gain exclusion. Hey, you're getting an EXCLUSION of tax on
one-quarter million dollars of UNEARNED income. You want egg
in your beer?

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Mike <dontspamthecat[at]boo.ya> wrote:

<snip
- quote -

No. Your actions would have been the "ripoff". You cannot
sell anything to yourself, at least for tax purposes, and I
cannot imagine for any other purposes either. Certainly real
estate, which cannot be moved, so must be titled at the same
city, town or county, so what would "retitled" entail?

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Mike <dontspamthecat[at]boo.ya> writes:

- quote -

That is correct.

- quote -

What you do with the proceeds is completely irrelevant.

- quote -

Yes.

- quote -

No, you couldn't have.

That very thing was the subject of a long thread in this
very newsgroup at the time, and as I recall, the consensus
(thanks to a typically tightly cited and reasoned post from
EdZ, I believe :-) was that the "deemed sale" thing was not
allowed for personal residential real estate.

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

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Mike <dontspamthecat[at]boo.ya> writes:

- quote -

Almost. The long-term capital gain rate has been lowered to
15%. You can read details about the $250,000 exclusion in
IRS Publication 523. It sounds like you qualify.

- quote -

Yes. Remember, we're not talking about sale price here,
it's the gain. Again, see Pub 523.

- quote -

If you Google this group on "121" you should find several
discussions reaching the conclusion that you couldn't have
done this.

Phil Marti
Topeka, KS

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

I am trying to sell my home, and currently have a contract
on another house that is being built. I am single, and have
lived in my current home for 7 years.

I read somewhere that;

Single homeowners may keep $250,000 in profits tax-free on
the sale of a home they have owned and lived in for two of
the past five years. Anything above that amount is taxed at
20 percent.

I expect to make a profit GREATER than $250,000, but I plan
on taking the entire proceeds of the sale of my house and
using that as the principal for the new residence.

Question. Will I still be taxed on the profit greater than
$250,000?

If so, it seems kind of a ripoff, as theoretically, I could
have retitled my house (sell to myself) a few years ago
while the profit would have been less than 250K, and now I
would be in a situation where I sell the house to another
party and the profit would still be less than 250K.

Thanks,

-Mike

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->