L-Man
Joined: 02 Jun 2006
Posts: 1
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 Posted:
Fri Jun 02, 2006 9:40 am Post subject:
California Capital Gains Clarification... |
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Just wanted to make sure I understand...
I purchased a brand new home in March of 2005 for $257,033; approximately $206,000 first mortgage and approximately $51,033 second (line of credit). The property immediately appreciated to close to $400,000 in just a few short months.
Around September of 2005 I took out $89,000 of the equity in the form of a line of credit. The company I got the line of credit with sent the company that held the $51,033 line of credit a payoff check and also sent payoff checks to some of my other debts and cut me a check for the remainder.
My new balance with the first and the new line of credit is apporximately $295,000.
Currently I'm putting the house up for sale because I'm purchasing a new home. From my understanding, since this is a owner occupied home and I'm moving to another owner occupied, I cannot do what an investor can do with a 1031 exchange to avoid any penalties.
I have NOT lived in this house for 2 years and I know that I will be paying capital gains. What I want to know is will the IRS take into consideration the fees I had to pay in order to get the home sold?
For example, if I owe $295,000 and I were to sell this home for $395,000 and had to pay an agent; say 6 percent ($23,700), plus prepayment penalties of $8,000 and say about $5,000 in other fees; will they tax me only on what remains after paying those fees, or would they tax me based on the full $100,000? And would it be a flat 15% since I have lived in the house for over a year?
Will they also calculate it base on the remaining time I have before I made it to 2 years.
Hope I'm making sense.
Thanks in advance for your help,
L-Man
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The "dumbest" question is the one you don't ask. |
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