Selling house for a Rolex

[SpicyMikey]

Originally Posted by Cloudchaser

I don't track all state tax laws, and am not giving tax advice, but at the federal level, that exemption is most definitely not a one-time exemption.

If you are talking about the USA, yes unfortunately it's a one time exemption at the federal level. That would be really nice if we could avoid taxes on real estate sales lol. But the federal government is not the generous. If you make money they want their piece. Except, like I said, one time near the end of your life as a 1 time exemption.

Mike

[SpicyMikey]

Originally Posted by EEpro

You are correct. It is NOT one time. You can do it every 2 years if you like and are up on your homes or flipping them after renovation. Tax free profit every time. If you have to move for a job you can do it in less than 2 years tax free from the deduction is reduced by the ratio of months to 24 months.

https://www.irs.gov/businesses/small...state-tax-tips

I think we're talking about 2 different things guys. What I'm referring to is capital gains that are realized but NOT rolled into another property. We are only shielded from paying income tax on realized gains (not reinvested) of our main home only once in our life. This is not a real estate tax group lol, but I brought it up because the OP was talking about taking out money from his gains to use on other things rather than rolling it into more real estate. And what I was telling him was enjoy it but remember you have to pay taxes on the money that you rolled out.

Mike

[SpicyMikey]

Originally Posted by Cloudchaser

I think most people that "walked away from their houses" did so not because the house was worth less than when it was bought but because they owed more on the house than it was worth AND could not afford the monthly "nut."

Exactly. No one walks away from their home for no good reason. In almost every case it's because they could not afford the mortgage anymore and they couldn't sell it because the house was worth less than the mortgage itself (no equity). That's the catch-22 situation where your only choice then is to just throw up your hands and walk away

Mike

[marcusp23]

Wow

[just1time]

Originally Posted by dnd2984

Where the money comes from is irrelevant. If you can afford without changing your lifestyle go for it.

This

[Cloudchaser]

Originally Posted by SpicyMikey

I think we're talking about 2 different things guys. What I'm referring to is capital gains that are realized but NOT rolled into another property. We are only shielded from paying income tax on realized gains (not reinvested) of our main home only once in our life. This is not a real estate tax group lol, but I brought it up because the OP was talking about taking out money from his gains to use on other things rather than rolling it into more real estate. And what I was telling him was enjoy it but remember you have to pay taxes on the money that you rolled out.

Mike

Absolutely incorrect. So long as you live in your home for two of the last five years, the exemption exists to use as many times as you would like.

It seems as though you might be confusing the exemption with a 1031 exchange. If your property is purchased or sold as part of a 1031 exchange, then there can be obligations to re-invest in real estate.

However, you could sell your primary residence every two years and pay no taxes (as long as you stay inside the $250k/$500k exemption parameters). Again, there could be variance at the state level that I'm not aware of but, federally, this is a tried and true exemption...and a little controversial as many would like to see it changed. To this point, it remains unchanged, though. File your 1099S on the transaction and Uncle Sam keeps his mitts off your duckets!

Remember, out here in the West, the last 20 years have been a real estate whirlwind; this exemption is well understood. My wife and I have exercised it three times in the last 12 years. It's also part of the reason that the average homeowner moves every 7 years these days.

Again, I'm not giving any tax or real estate advice, just sharing info; the IRS link provided above covers it specifically.

Oh, and if you're right and my accountant and I are wrong, I'm due in federal prison...

[SpicyMikey]

Originally Posted by Cloudchaser

Absolutely incorrect. So long as you live in your home for two of the last five years, the exemption exists to use as many times as you would like.

It seems as though you might be confusing the exemption with a 1031 exchange. If your property is purchased or sold as part of a 1031 exchange, then there can be obligations to re-invest in real estate.

However, you could sell your primary residence every two years and pay no taxes (as long as you stay inside the $250k/$500k exemption parameters). Again, there could be variance at the state level that I'm not aware of but, federally, this is a tried and true exemption...and a little controversial as many would like to see it changed. To this point, it remains unchanged, though. File your 1099S on the transaction and Uncle Sam keeps his mitts off your duckets!

Remember, out here in the West, the last 20 years have been a real estate whirlwind; this exemption is well understood. My wife and I have exercised it three times in the last 12 years. It's also part of the reason that the average homeowner moves every 7 years these days.

Again, I'm not giving any tax or real estate advice, just sharing info; the IRS link provided above covers it specifically.

Oh, and if you're right and my accountant and I are wrong, I'm due in federal prison...

You're just not hearing me. I'm not talking about that. I'm not talking about selling property and buying other property with the equity. I have bought and sold several houses in my life to and have not paid any taxes yet. The housing market is not only on fire in the West my friend.

I'm talking about selling the property and using it to buy a boat or a bunch of Rolexs. That was the OPs question.

I'm talking about selling your property and not buying anything new and just going to rent something. That's where the tax event occurs.If you keep using the profits to buy other real estate you are correct you are not triggering a tax event. But it's really not an "exemption" it's more of a deferral until the end when you sell your last piece of property. If you never sell your property and it goes to your estate then the beneficiaries of that esstate pay the taxes.

Do you really think the federal government is gonna never want their piece eventually.? Remember this conversation and you'll find out at the end when you're old and you can say oh yeah i guess that guy on TRF was right lol

Mike

[Overwound]

Sounds familiar. Similar username, question and location.

https://www.rolexforums.com/showthre...=selling+house

[padi56]

Originally Posted by Overwound

Sounds familiar. Similar username, question and location.

https://www.rolexforums.com/showthre...=selling+house

And now a ex-member so not now a so sensational troll.