Want this question answered?
To qualify you must have owned your home for at least 5 years and have lived in it for two of those five years. There are exceptions for active duty military.
The law changed in 1997. Before that, you had to buy a new home to avoid capital gains tax. The law no longer cares what you do with the money from the sale of the old home. If the house was your main home for two of the previous five years and you owned the home for two of the previous five years, the first $250,000 in capital gains is exempt from tax. The exemption increases to $500,000 if you file jointly and it was also the main home of your spouse for two of the previous five years.
If the house was your main home for any two of the five years before you sold it and you owned the house for any two of the five years before you sold it, the first $250,000 of capital gains is excluded from income. If you file a joint return and the house was also your spouse's main home for two of the five previous years, the exclusion goes up to $500,000. You can use the exclusion once every two years. Any capital gains above the exclusion amount are taxable.
Business property that is held for one year or less is considered to be held on a short-term basis. If you sell, scrap, retire, or otherwise dispose of a short-term capital asset, any related gains will be taxed at your ordinary income tax rate. However, if the property was held for more than one year, gains on it will generally be treated as long-term capital gains. While property used in a trade or business is technically not a "capital asset," in the IRS's view, the tax laws do apply the more favorable capital gains tax rates to this property. In 2003, Congress lowered the maximum dividend and capital gains tax rates for most (but not all) dividends and capital gains from 20 to 15 percent for qualifying taxpayers. Taxpayers in the 10- and 15-percent tax brackets are eligible for an even lower rate of five percent. In 2008, the rate for taxpayers in the 10- and 15-percent tax brackets fell to zero. As originally enacted, these tax rate cuts were temporary and were scheduled to expire at the end of 2008. However, Congress extended the cuts for two more years through December 31, 2010
No. You pay tax on dividends, which is NOT always the same as capital gains tax rate. Cuurently it is pretty much the same. althoug only a few years back it was the same as ordinary income.
To qualify you must have owned your home for at least 5 years and have lived in it for two of those five years. There are exceptions for active duty military.
It all depends on how much the property has gone up in value.
The law changed in 1997. Before that, you had to buy a new home to avoid capital gains tax. The law no longer cares what you do with the money from the sale of the old home. If the house was your main home for two of the previous five years and you owned the home for two of the previous five years, the first $250,000 in capital gains is exempt from tax. The exemption increases to $500,000 if you file jointly and it was also the main home of your spouse for two of the previous five years.
If the house was your main home for any two of the five years before you sold it and you owned the house for any two of the five years before you sold it, the first $250,000 of capital gains is excluded from income. If you file a joint return and the house was also your spouse's main home for two of the five previous years, the exclusion goes up to $500,000. You can use the exclusion once every two years. Any capital gains above the exclusion amount are taxable.
If the house was your main home for any two of the five years before you sold it and you owned the house for any two of the five years before you sold it, the first $250,000 of capital gains is excluded from income. If you file a joint return and the house was also your spouse's main home for two of the five previous years, the exclusion goes up to $500,000. You can use the exclusion once every two years. Any capital gains above the exclusion amount are taxable.
It's wise to be up to date on capital gains information for income tax purposes. The IRS allows three years to amend these gains from the date they were gained.
A seller who sells a house in which he has lived in for two of the last five years will have to pay about $5000 in form of capital gains.
Assuming that all conditions have been met; 20 years for property owned by individuals, 30 years for property owned by the state government.
Check the laws in your state regarding "flipping." WA state has no flipping laws, but Oregon does. So it all depends on where you live.
Business property that is held for one year or less is considered to be held on a short-term basis. If you sell, scrap, retire, or otherwise dispose of a short-term capital asset, any related gains will be taxed at your ordinary income tax rate. However, if the property was held for more than one year, gains on it will generally be treated as long-term capital gains. While property used in a trade or business is technically not a "capital asset," in the IRS's view, the tax laws do apply the more favorable capital gains tax rates to this property. In 2003, Congress lowered the maximum dividend and capital gains tax rates for most (but not all) dividends and capital gains from 20 to 15 percent for qualifying taxpayers. Taxpayers in the 10- and 15-percent tax brackets are eligible for an even lower rate of five percent. In 2008, the rate for taxpayers in the 10- and 15-percent tax brackets fell to zero. As originally enacted, these tax rate cuts were temporary and were scheduled to expire at the end of 2008. However, Congress extended the cuts for two more years through December 31, 2010
Up until the time ownership changes. You are considered to have sold the property to the government for the amount they paid you when they took your property. Any resulting capital gains are taxable according to the usual rules. If this was your main home and you owned/used it for less than the two out of five years required to receive the $250,000 exclusion, you may qualify for a pro-rated exclusion due to circumstances beyond your control.
Yes. Federal tax is due on the gain also.