Tax question on selling a house

[spidey07]

I know if you sell your primary residence you don't have to pay capital gains on the first 250k gain. But what about me and my girl both own houses, each our respective primary residence. She sells her and moves in with me and we get married.

How does that work? Sell before or after getting married? The sale of her home will be a sizable capital gain and the tax would be enough to care about, but I can't imagine there's not some provision to allow for what I describe.

Thanks in advance.

 

[armstrda]

sell now, get married next year

 

[BreastInspector]

Originally posted by: spidey07
I know if you sell your primary residence you don't have to pay capital gains on the first 250k gain. But what about me and my girl both own houses, each our respective primary residence. She sells her and moves in with me and we get married.

How does that work? Sell before or after getting married? The sale of her home will be a sizable capital gain and the tax would be enough to care about, but I can't imagine there's not some provision to allow for what I describe.

Thanks in advance.

Couldn't you just ask CPA?

Note: I didnt say "a CPA" I meant CPA on the forums.

 

[Ronstang]

I do not know the exact way the law works but I was under the assumption that if you put your capital gain right back into a primary residence then there are no taxes. If that is still true then what if she sells her house and uses the capital gain to pay down the loan on your house since it will be her house too? I am not sure if this is legal but worth investigating. If your house is paid off then it may be time to upgrade.

 

[Mojoed]

Originally posted by: BreastInspector

Originally posted by: spidey07
I know if you sell your primary residence you don't have to pay capital gains on the first 250k gain. But what about me and my girl both own houses, each our respective primary residence. She sells her and moves in with me and we get married.

How does that work? Sell before or after getting married? The sale of her home will be a sizable capital gain and the tax would be enough to care about, but I can't imagine there's not some provision to allow for what I describe.

Thanks in advance.

Couldn't you just ask CPA?

Note: I didnt say "a CPA" I meant CPA on the forums.

wwybywb?

 

[sjwaste]

If there's a sizable capital gain to speak of, you should ask a tax attorney or CPA, no matter what you're told here. No use gambling with your earnings.

 

[spidey07]

Originally posted by: Ronstang
I do not know the exact way the law works but I was under the assumption that if you put your capital gain right back into a primary residence then there are no taxes. If that is still true then what if she sells her house and uses the capital gain to pay down the loan on your house since it will be her house too? I am not sure if this is legal but worth investigating. If your house is paid off then it may be time to upgrade.

Reading around you can exclude 250K of gains (500K if married filing jointly) without paying any capital gains tax if you've been there for a total of two years out of the last 5. If primary for two straight years then you can take the exclusion, I'm not really reading any requirement about needing to use the gains for another primary residence (which was how I thought it worked).

 

[lupi]

Originally posted by: Ronstang
I do not know the exact way the law works but I was under the assumption that if you put your capital gain right back into a primary residence then there are no taxes. If that is still true then what if she sells her house and uses the capital gain to pay down the loan on your house since it will be her house too? I am not sure if this is legal but worth investigating. If your house is paid off then it may be time to upgrade.

my guestimate from the little I know of the subject, they would possibly have to do a refinance to get new papers for the house in order for the money from her home sale to be eligible to be put into the home and avoid the gain taxes.

 

[spidey07]

Originally posted by: sjwaste
If there's a sizable capital gain to speak of, you should ask a tax attorney or CPA, no matter what you're told here. No use gambling with your earnings.

Agreed. But it's more fun talking to you guys.

 

[Ronstang]

Originally posted by: lupi

Originally posted by: Ronstang
I do not know the exact way the law works but I was under the assumption that if you put your capital gain right back into a primary residence then there are no taxes. If that is still true then what if she sells her house and uses the capital gain to pay down the loan on your house since it will be her house too? I am not sure if this is legal but worth investigating. If your house is paid off then it may be time to upgrade.

my guestimate from the little I know of the subject, they would possibly have to do a refinance to get new papers for the house in order for the money from her home sale to be eligible to be put into the home and avoid the gain taxes.

Like I said, I don't really know but it is something worth investigating.

 

[her209]

Originally posted by: spidey07
I know if you sell your primary residence you don't have to pay capital gains on the first 250k gain. But what about me and my girl both own houses, each our respective primary residence. She sells her and moves in with me and we get married.

How does that work? Sell before or after getting married? The sale of her home will be a sizable capital gain and the tax would be enough to care about, but I can't imagine there's not some provision to allow for what I describe.

Thanks in advance.

Its up to 500k for married. And it must be your primary residence 3 of the last 5 years whether you're single or married.

But I don't know how it would work if you (spidey07) didn't live there with her. Also, I don't know how it would work if she sold her house prior to getting married, but got married in the same year.

 

[GuitarDaddy]

Originally posted by: armstrda
sell now, get married next year

:thumbsup:

But either way as long as she has lived in the house for 2yrs, she or you guys as a couple can take the $250k exclusion, if you can claim you lived there as a couple for 2yrs and sold after you married you could claim the $500k exclusion.

 

[Mike Gayner]

Move to NZ where we don't have CGT :thumbsup:

 

[her209]

Originally posted by: Mike Gayner
Move to NZ where we don't have CGT :thumbsup:

Hahahahahahaha... love the name, Mike Gayner.

 

[spidey07]

Seems like it doesn't matter when she sells even if she moves in with me, well she's got 3 years effectively. She would meet the ownership test (owned for two years out of the last 5) and the use test (lived there two years out of the last 5). As such she can take the 250K exemption. Then when/if I sell mine I can take the 250K exemption.