xumatong[at]yahoo.com wrote:

- quote -

To get an exclusion for the capital gains, you must OWN and
OCCUPY the condo as your PRIMARY residence for two years out
of the five years prior to sale. You don't appear to meet
any of the exceptions or special "unforseen circumstances".

- quote -

OCCUPY means "live in"

- quote -

Your mortgage arrangements have NOTHING to do with the
taxability of your sale. What you tell your banker is
between you, him, and the bank fraud people.

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xumatong[at]yahoo.com wrote:

- quote -

Did you continue to make the condo your primary residence
for those 6 months? If so, $250,000 of gain is excludible
($500,000 on a joint return if your spouse met the 2 year
use test). If not, then you do not appear to qualify for an
exclusion.

- quote -

Once again, you have to meet both a 2 of 5 year ownership
test AND a 2 of 5 year primary residence test.

- quote -

Darned if I know. I'm not a banker.

- quote -

Yes it matters since if the new house is your primary
residence from day 1, you won't be able to meet the 2 year
primary residence test on the old house.

- quote -

You can say anything you like but your gain is excludible
only if the condo is your PRIMARY residence for two years.

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<xumatong[at]yahoo.com> wrote:

- quote -

You WILL pay capital gains. You must own and occupy the
condo for 2 years out of 5 to avoid capital gains.

- quote -

You WILL pay capital gains. You must own and occupy the
condo for 2 years out of 5 to avoid capital gains.

- quote -

Generally, they won't care about what you're going to do
with the condo, as long as your total income and debt
service requirements meet their underwriting standards. They
will care about your intentions for the new house as they
will charge you a lower interest rate on an owner-occupied
property than they will on an investment property.

Ira Smilovitz

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"xumatong[at]yahoo.com" <xumatong[at]yahoo.com> wrote:

- quote -

Not sell it.

- quote -

No. You have to live there as well. Which sort of defeats
the purpose of having bought the second house.

- quote -

It's crystal clear. You have to LIVE there.

- quote -

If you have lender questions, you should ask a lender.

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

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xumatong[at]yahoo.com posted:

- quote -

You must have lived in it as your main house for at least
two years of the last five. If you stay in it for 6 more
months, you'll meet the test -- and you would not have to
pay taxes on the first $250,000 of _profit_ ($500,000 if
MFJ).

- quote -

No. That won't work, because you won't have *lived* in the
condo for 2 years.

- quote -

Yes, you have to physically be in the condo (or at least be
able to claim it was your main home) for 2 full years.

And your plans to rent it would corrupt your status as far
as "tax-free" profits are concerned, not to mention creating
a rental property situation which -- from your questions --
you shouldn't get into without professional guidance.

- quote -

You're treading on thin ice. The plan you seem to be
envisioning sounds like tax evasion.

As for the mortgage process, they are interested only in the
appraised value of any property vs. your loan request -- and
compared to your ability to repay the loan.

Be patient. Wait 6 months, and do everything in a
straightforward manner. But if you want to buy another
house "because you love it" ... you should be prepared to
carry the cost of it as a second home, which you maybe use
for weekends, until you've met the requirements for your
present home's sale to be free of capital gains tax on the
aforementioned $250,000 of profit. (And, btw, don't plan to
count your ownership of the "new" home until you actually
have sold your condo and have moved into it as your main
home.)

Bill

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1. Qualify for IRC 121
2. Maybe, see #1
3. Maybe see IRS Bulletin 2005-7
4. You can do either but if you are honest the taxes may be
different
5. and on, ask your banker

BC

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<xumatong[at]yahoo.com> wrote:

- quote -

Stay in it until you've both owned and lived in it for 2
years. Given the rest (unquoted) of your post, you have no
alternative.

--
Phil Marti
Clarksburg, MD

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<xumatong[at]yahoo.com> wrote

- quote -

You would have to live in the condo for at least 24 months
to avoid the gains (up to $250K/$500K married)

- quote -

No.

- quote -

You have to live in the condo for 24 months to avoid up to
$250K of the gains ($500K is married)

- quote -

About the same.

- quote -

Yes. And the'll ask what you intend to do with the house.

- quote -

Yes.

- quote -

Yes.

The lender may be a bit skittish on lending on a property
that will remain vacant for that long. They may also have
legitimate concerns about your ability to make two house
payments.

--
Paul A. Thomas, CPA
Athens, Georgia
taxman at negia.net

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Here is my situation. I have had a condo for the last 18
months. I would like to buy a house. What are my options to
not pay capital gains taxes on my condo when i sell it?

1. If i bought a second house and did not sell the condo for
another 6 months (so that i would have had it for 2 years),
and did not rent it out for the 6 months, does it mean that
i wont have to pay capital gains

2. If i bought the second house, did not rent out my condo
for 6 months, but rented it out after 6 months for let's say
a year, can i then sell it without having to pay the capital
gains tax? Do i have to physically be in the condo for the 6
months or can i live in the new house and just keep the
condo locked up?

3. How does the mortgage process work for someone who
already owns property? Will the bank ask me what i intend to
do with my condo? Does it matter if my new house is going to
be a primary residence or not? Can i say it is going to be
my primary residence, but not for 6 months?

Thanks for the answers.

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