Profile picture for ca1973

Do I pay taxes if I buy a new home after selling my home?

I know that if you wait for two years, you don't pay any taxes. But I'm not happy with the home I bought a few months ago and want to resell it. It's valued now 50k more than what I originally paid. If I sell my home now and use all the money to buy another home, will I be taxed because of the 50k profit?

I'm asking because, in reality, I wouldn't make any profit. I mean, I'd use the entire 50k to cover the sale of my home and purchase of my new home.
  • October 01 2012 - North Hollywood
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Answers (5)

check with cpa or accountant to make sure. tax laws change all the time.
  • October 03 2012
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Profile picture for wetdawgs
The irs.gov website has an excellent section on home purchase/selling costs and what is deductible.  Here's a link.  


  • October 01 2012
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Profile picture for ca1973
Thank you wetdawgs. Would you have a rough estimate of how much this tax would cost? I'll definitely contact my tax person, but she's out until January of next year :(

In summary...
Purchase price of current home - 500,000
Closing costs (including PMI payoff) - 20,000

Possible sale price now - 550,000
4% realtor commission - 22,000

Thank you so much!
  • October 01 2012
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Profile picture for Ofe Polack
Wetdawgs is right on the ball, as usual!  Have a word with your accountant to double check your particular situation.
  • October 01 2012
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Profile picture for wetdawgs
Home Capital gains no longer can be carried over to purchase of a new home.   If a home has been your primary residence for less than 2 of the last five years, you are likely to owe capital gains if your sales price is 50 k greater than your cost basis.  (Cost basis will include costs of selling as well as any capital improvements (but not repairs)).

These tax rules were changed back in the late 1990s.  Please review with your tax professional.



Good luck in your sale.

  • October 01 2012
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