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by nawoct on January 25th, 2007

nawoct

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I purchased a house and closed escrow on March 4, 2004. I then sold that house and closed escrow on March 2, 2006. The house sold for $295,000. How much tax am I looking at since I fell 2 days short of being 2 years. Thanks Kurt

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  • by strathcona on January 26th, 2007

    strathcona

    For the purposes of Federal reporting (you may also owe state taxes), you would owe capital gains (the difference between the purchase and sale price minus any selling expenses) times 28% as a worse case scenario. You can deduct certain improvements (the adjusted basis) to the property against the amounts owed. There are certain exceptions to the two year rule - "You sold or exchanged your home due to a change in place of employment or health or unforeseen circumstances." I would definetly have a professional do your taxes for 2006! Publication 523 is comprehensive and gives many examples.

    Here are some of the IRS Publications.
    http://www.irs.gov/taxtopics/tc701.html
    http://www.irs.gov/publications/p523/ar02.html#d0e696

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You're reading I purchased a house and closed escrow on March 4, 2004. I then sold that house and closed escrow on March 2, 2006. The house sold for $295,000. How much tax am I looking at since I fell 2 days short of being 2 years. Thanks Kurt

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