Quote:
Originally Posted by steve_pdx .
#1;My question is, with my income level and being on SSDI will I have to pay taxes on the sale of the home since I haven't lived in the home for 2 years prior to selling
#2;and since I will be reinvesting most, if not all profit into another home in another state?
Thanks in advance,
Steve |
I am on SSDI and considered below poverty level and bought a home in Jan. 2015 which is my primary residence. I am looking to sell my home and will make approx. $20k profit on the sale above the purchase price. I am then moving to another state with much lower housing cost and purchasing a home for cash.
#1;if you sell your home at a gain before 2 years are up and you don't qualify for any of the exceptions, you pay tax on the gain. If you have owned the house for a year or less, the gain of $20K will be taxed at your ordinary income rate.If you have owned the home for more than one year, then the gain’d be taxed as LTCG taxed at 0% UNLESS your marginal ax rate is 25% or HIGHER than 25%, SO I guess no tax on your lTCG of $20K. If you have to move because of health, a job transfer, or other unforeseen circumstances, you may still be able to exclude your gain of $20K. The maximum amount you can exclude will be prorated.. You need to report your LTCG on 1040 line 13 on SCh D/ form 8949. Your LTCG of $20K can increase your AGI level; however, if you are single filer, then UNLESS your provisional income, your AGI($20K) PLUS 50% of your SSDI benefits is more than $25K, non of your SSDI is taxable; if the amt is between $25K and $34K< then up 50% of your SSDI benefits can be taxable.
#2;No; this situation does not affect if your LTCG is taxable. Since 1998, most people haven't had to worry about owing taxes when they sell their home, even if they clear a hefty profit when they do so. There's no longer any need to buy another house to roll over any gain, and in many cases the taxpayers don't even have to report the sale of their homes on their tax returns aslongas you use/own and live in the house for two of the last five years