babyrump[at]gmail.com (babyrump) posted:

- quote -

Simple answer: There is no tax on the proceeds from the house you lived
in for ten years and sold for $180,000. That's because up to $250,000
_gain_ from the sale of your home is non-taxable ($500,000 if MFJ).
There's also no reporting required.

What you do with the proceeds is unimportant. I believe you're confused
by the "old" rules which required reinvestment into another home in
order to avoid taxation. Since about 1997, the tax law has been as
cited above. The only requirement is that you have lived in the house
as your "main home" for at least two years.

Furthermore, you can start the process over again when you purchase the
next home. Two years later with the same stated conditions, that would
qualify for the same treatment: no taxes on up to $250,000 ($500,000 if
MFJ) -- and no reporting required.

Bill

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In 2007 we sold our house that we lived in for ten years(our only
property) and I am having difficulty determining if the proceeds are
taxable. We owed about $ 100,000 on our mortgage and we sold the the
house through a real estate agent for $180,000. We moved into a house
that my father-in-law built and we had a lease option to buy. We had
made a deposit on the house of thirty five thousand. We have since
decided not to buy the house that we have the option on but have
instead decided to invest in a house built elswhere in the future. Is
the proceeds from the sale of the house taxable? Is it taxed on the
total proceeds or the amount of the settlement after fees and
commissions and buyer requested improvements(new roof)? Any help would
much appreciated, thanks.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >