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Originally Posted by creditcardfree
Probably not. If you lived in the condo for 24 months out of the last 60 months (5 years) and this was your primary residence, then your profit is exempt from taxes up to $250,000 if single and $500,000 if married.
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Actually, we only lived in the first condo for 13 months. So I guess we will owe tax (capital gains?).
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Originally Posted by ChimbleySweep
Your second and third lessons go hand-in-hand, don't they? I hate when realtors don't do their job!
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We actually had two... The first one we had was very friendly and helpful, but did not know the neighborhood that well. We dropped the price once, but did not get any offers for 6 months, then we took it off the market. The following spring, we placed it on the market with another realtor. This one lived in the condo complex (in fact, he could see our unit from his kitchen window) so knew the area and was immediately available for any showings. Plus he also owned two units in the building and so had a vested interest in getting the best price. We stuck it out with him. We ended up dropping the price three times -- and the third time was the charm.
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Originally Posted by poundwise
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Thanks for the link!
The "Home Sale Tax Exclusions: reduced exclusions" section was very helpful. Since we moved due to a job change but lived in our old home for less than 2 years, I guess we qualify for a reduced exclusion.
According to the formula given, I don't think we will be owing any tax: our "profit" from the sale of our condo is exactly 30k, and we lived there for about 390 days (30daysx13months). So 390 divided by 730 = 0.53. Multiplying the result by $250,000 gives about 133k for each spouse. So a profit of upto 267k would have been tax free - I wish!!! (Did I do that right?)
As it is, our "profit" is 30k. When you subtract the 6% commission and 1% transfer tax, it will be less than 15k. Factor in the months we were paying mortgage while it sat unsold, we actually lost about 10k.