- This topic has 94 replies, 20 voices, and was last updated 16 years, 11 months ago by
temeculaguy.
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June 8, 2007 at 1:33 PM #57972June 8, 2007 at 1:33 PM #57999
SD Realtor
ParticipantThe cap gains exclusion is for primary residence and applies to the sale for that tax year. Single homeowners have the 250k exclusion, married have 500k. The exclusion is for that year so when you filed in April of 2006, you applied the exclusion for the 2005 sale.
You do not need to repurchase another home. You are free and clear as long as you filed correctly in April of 06 for the 2005 sale.
I assume you are talking about a primary residence not an investment property..
I am not a CPA or a tax specialist…
SD Realtor
June 8, 2007 at 1:34 PM #57975recordsclerk
Participant“If someone sold in 2005 for a great profit (say 300k) after 2+ years of ownership, are there any tax issues with waiting? In other words, would they need to buy again in a certain amount of time to avoid the 15% + 9% state tax on the profit?”
If you are a married couple and this was your primary residence you would not have to pay any taxes. If you are a single person, the first 250K profit would not be taxed, but the 50K would.
June 8, 2007 at 1:34 PM #58001Participant“If someone sold in 2005 for a great profit (say 300k) after 2+ years of ownership, are there any tax issues with waiting? In other words, would they need to buy again in a certain amount of time to avoid the 15% + 9% state tax on the profit?”
If you are a married couple and this was your primary residence you would not have to pay any taxes. If you are a single person, the first 250K profit would not be taxed, but the 50K would.
June 8, 2007 at 1:59 PM #57983New_Renter
ParticipantI sold for multiple reasons (just recently closed escrow):
1. Pocket $500K Tax Free. The goal would be to do this multiple times over the coming decades, as long as the tax code allows it. This tax loophole is unbelievable and just to tempting not to take advantage of it at the top of the market.
2. To move into a better area and nicer home (better schools).
3. When the real estate market is depreciating, it makes perfect sense not to own (renting is a far better deal). This is easily seen by playing with a good buy vs. rent calculator.
June 8, 2007 at 1:59 PM #58009ParticipantI sold for multiple reasons (just recently closed escrow):
1. Pocket $500K Tax Free. The goal would be to do this multiple times over the coming decades, as long as the tax code allows it. This tax loophole is unbelievable and just to tempting not to take advantage of it at the top of the market.
2. To move into a better area and nicer home (better schools).
3. When the real estate market is depreciating, it makes perfect sense not to own (renting is a far better deal). This is easily seen by playing with a good buy vs. rent calculator.
June 8, 2007 at 1:59 PM #57981NotCranky
ParticipantGood for you SDR. I bet you will replace that rental to good results one day if you want to.
Records Clerk,
I have read some of your other posts. You have much to be proud of for what you have accomplished. I have also made good strides without big wealth and a big education behind me. CongratsJune 8, 2007 at 1:59 PM #58007ParticipantGood for you SDR. I bet you will replace that rental to good results one day if you want to.
Records Clerk,
I have read some of your other posts. You have much to be proud of for what you have accomplished. I have also made good strides without big wealth and a big education behind me. CongratsJune 8, 2007 at 2:45 PM #579984runner
ParticipantWe sold a condo.
If we had rented it out, we would have been about $100/month above water, about $400/month if you include payments toward principal.
By selling, we cashed out about 180k$. Given the choice between a risk-free 9-10k$/year and earning 5k$/year as a landlord, it was a no-brainer.
June 8, 2007 at 2:45 PM #58025ParticipantWe sold a condo.
If we had rented it out, we would have been about $100/month above water, about $400/month if you include payments toward principal.
By selling, we cashed out about 180k$. Given the choice between a risk-free 9-10k$/year and earning 5k$/year as a landlord, it was a no-brainer.
June 8, 2007 at 3:09 PM #58006one_muggle
ParticipantWe cashed out to free up time and money for kids and business opportunities (‘mid-century’ homes in the hills are time/money pits), as well as to get out of a poor school system.
Besides speculating on the RE bust, we are renting for many other reasons. With one kid about to start kindergarten and another behind him, renting allows us the freedom to try the public schools in one town, but easily try another if things don’t work out. It also lets us afford private school without becoming house & school poor. Mortgages for decent homes in good school districts would run us about $4-5k, and private schools around here (at least the good ones) are ~16-20k per kid . Even though make decent money, after investments, and college funds, etc, that pretty much wipes us out.I know I could do much better if I moved to somewhere like upstate NY, as I think lostkitty did. I grew up in NYC area and spent six years in the Buffalo area–lostkitty can have NY (no offense, I am glad you like it–I think your brain may have been frostbitten (jk)–but I am happy you like it.
I also spent five years in Atlanta and some time in NC. It is fun to visit, but I will never live in the South again. I have nothing against the people there, but No Thanks.
Washington DC was nice for three months–too bad I spent a year there. There is a reason Congress is not in session in August (OMG). It is no longer hard to believe DC was built on a drained swamp.
Anyone ever lived in Portland or Seattle?–I think I am getting that wanderlust again.
-(vagabond aka)one muggle
June 8, 2007 at 3:09 PM #58033ParticipantWe cashed out to free up time and money for kids and business opportunities (‘mid-century’ homes in the hills are time/money pits), as well as to get out of a poor school system.
Besides speculating on the RE bust, we are renting for many other reasons. With one kid about to start kindergarten and another behind him, renting allows us the freedom to try the public schools in one town, but easily try another if things don’t work out. It also lets us afford private school without becoming house & school poor. Mortgages for decent homes in good school districts would run us about $4-5k, and private schools around here (at least the good ones) are ~16-20k per kid . Even though make decent money, after investments, and college funds, etc, that pretty much wipes us out.I know I could do much better if I moved to somewhere like upstate NY, as I think lostkitty did. I grew up in NYC area and spent six years in the Buffalo area–lostkitty can have NY (no offense, I am glad you like it–I think your brain may have been frostbitten (jk)–but I am happy you like it.
I also spent five years in Atlanta and some time in NC. It is fun to visit, but I will never live in the South again. I have nothing against the people there, but No Thanks.
Washington DC was nice for three months–too bad I spent a year there. There is a reason Congress is not in session in August (OMG). It is no longer hard to believe DC was built on a drained swamp.
Anyone ever lived in Portland or Seattle?–I think I am getting that wanderlust again.
-(vagabond aka)one muggle
June 8, 2007 at 3:16 PM #58008ParticipantMuggle,
To bad you don’t like Buffalo, you could have it for 4-5k month. I like your reasons and sense of adventure, family style.June 8, 2007 at 3:16 PM #58035ParticipantMuggle,
To bad you don’t like Buffalo, you could have it for 4-5k month. I like your reasons and sense of adventure, family style.June 8, 2007 at 5:34 PM #58032Irish
ParticipantI finally sold a 3 unit property in Hillcrest last year after owning for 12 years. I 1031ed the $500k capital gain into commercial real-estate thru Triple-Net. I felt San Diego real estate was at the peak and will only go down in the coming years. I receive a 7% return on the investment with none of the hassles of being a landlord. I may get back into rental units in San Diego when prices have fallen to a more sensible level in 2 or 3 years from now.
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