lls8000 wrote:

- quote -

The only way you can qualify for a pro-rated exemption of
the tax on the capital gains is if you fall into one of the
exceptions. Basically, if you were forced to sell the home
early because of unforeseen circumstances, then you can
qualify for a proration. These include things like taking a
job in another community, having multiple births, etc.
Otherwise you will have to pay tax on all of the capital
gain.

Dennis

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- quote -

The pro-ration is only for specific circumstances on the
sale of the home including moving for a job, or other
unforeseen circumstances. You will be paying 15% tax on the
gain (sales price less selling costs less purchase price)
unless you own and live in the house for 2 years (out of the
last 5).

Wayne Rivers, CPA

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"lls8000" <lls8000[at]hotmail.com> wrote
- quote -

Any allowed exclusion would depend on the *why's* of you
selling. Is it for a job change (to another city?), the
birth of twins?, a death in the family?, loss of a job?, or
what?

Beyond that, only the gain amount, not what you take from
the closing table, is taxed. And since you lived there for
more than 12 months, it's at the capital gains tax rate.

There may be very little gains in 20 months when you factor
in the closing costs on the front and the back end. Real
estate commissions of 6 - 8 % eat up most gains in less than
two years.

--
Paul Thomas, CPA
paulthomascpapc[at]bellsouth.net

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lls8000 wrote:

- quote -

The IRS web sight is pretty good with this information;

http://www.irs.gov/taxtopics/tc701.html
says;

To be eligible for an exclusion, your home must have been
owned by you and used as your main home for a period of at
least two years out of the five years prior to its sale or
exchange. The required two years of ownership and use during
the five year period ending on the date of sale do not have
to be continuous. You can meet the ownership and the use
tests during different two year periods. However, both tests
must be met during the five year period ending on the date
of the sale or exchange.

If you did not meet the ownership and use tests, or if
during the two year period ending on the date of the sale or
exchange you sold or exchanged another home at a gain and
excluded all or part of that gain, you may be allowed to
exclude the gain realized on the sale or exchange of your
home if:

* You sold or exchanged your home due to a change in place
of employment or health or unforeseen circumstances.

So, I hope this covers you. If not, you can figure out what
the sale will cost you, and negotiate for a delayed sale. It
would be a shame if a month cost you tens of thousands. A
buyer would probably be happy to help you out for a cut.

JOE

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"lls8000" <lls8000[at]hotmail.com> wrote:

- quote -

Yes, unless the sale is due to one of the special
circumstances that trigger a prorated exemption. See IRS
Publication 523.

--
Phil Marti
Clarksburg, MD

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lls8000 <lls8000[at]hotmail.com> wrote:

- quote -

You get to pro-rate it _if_ the sale is for an acceptable
reason (there's a list of them, which I don't have
immediately available).

Seth

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lls8000 wrote:

- quote -

You say just above "...until I've owned the property for 24
months,"

Remember, ownership is not enough. Residence is required.

ChEAr$,
Harlan Lunsford, EA n LA

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I am selling a house that I have lived in for 20 months.
Obviously, I don't expect to gain anywhere near $250,000. I
understand that I'll need to pay capital gains. I was under
the impression that the $250,000 exemption was pro-rated by
month, but now I'm not finding anything to that effect on the
IRS web site. Are all gains taxable if the seller hasn't
lived in the property for 24 months?

I'll try to hold of on closing on the sale until I've owned
the property for 24 months, but I'll be more likely to sell
early, if I can pay tax on a smaller portion of the gain
versus the entire gain.

Thanks, LLS

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