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I have a home that I can't sell for a year. I am getting married and not sure what I should do?

  • October 26 2013 - Tucson
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Answers (9)

Best Answer

Seek help  from a tax adviser.  You appear to be getting only part of the story from the group.  

As a single person, as I read the rule, you are probably able to qualify for a portion of the $250,000 exemption.  If you get special permission, you may qualify for more.  

I found this on the IRS website at http://www.irs.gov/uac/IRS-Issues-Home-Sale-Exclusion-Rules.  

"For qualifying sellers, the maximum exclusion amount of $250,000 ($500,000 for a married couple filing jointly) is limited to the percentage of the two years that the person fulfilled the requirements. Thus, a qualifying seller who owns and occupies a home for one year (half of two years) – and who has not excluded gain on another home in that time – may exclude half the regular maximum amount, or up to $125,000 of gain ($250,000 for most joint returns). The proportion may be figured in days or months."

Second, there are "unforeseen" standard exceptions.  You can also request a letter ruling from the IRS and ask for an exception based on your circumstances (see the last sentence below).  Again, this is best done by a tax lawyer.

"A sale will be considered as occurring primarily because of "unforeseen circumstances" if any of these events occur during the taxpayer's period of use and ownership of the residence:

  • death,
  • divorce or legal separation,
  • becoming eligible for unemployment compensation,
  • a change in employment that leaves the taxpayer unable to pay the mortgage or reasonable basic living expenses,
  • multiple births resulting from the same pregnancy,
  • damage to the residence resulting from a natural or man-made disaster, or an act of war or terrorism, and
  • condemnation, seizure or other involuntary conversion of the property.

Any of the first five situations listed must involve the taxpayer, spouse, co-owner, or a member of the taxpayer's household to qualify. The regulations also give the IRS Commissioner the discretion to determine other circumstances as unforeseen. "

  • October 27 2013
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I'd have to see it to know, but in general, price cures ALL. There is a price that SOMEONE will buy the home for, you just have to lower it enough to find that person.
  • October 27 2013
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Actually your tax adviser is in the best position to advise you on what would be best from a financial perspective. He knows the details of the transaction and can give you a very good idea of how much money you can save if you wait a year to sell.

Would your husband be willing to move in with you and live in this home until you can sell it without having to pay capital appreciation? Can you lease the home?
  • October 27 2013
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That is a good "problem" to have. From your question I thought you meant you have not been able to sell your house for a year. Your accountant is correct, currently a home owner (primary residency) needs to live in the property at least 2 of 5 years. I am glad you have a financial gain to worry about & get taxed on. Many sellers are upside down in their property, meaning they would have to write a check to sell their property. Enjoy the house for a year & see where the market is at, or sell it & pay taxes on the capital gains you profit. Either way, good "problems" to have. Spirit
  • October 26 2013
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Profile picture for wetdawgs
If you are concerned about capital gain, it has to be your primary residence for at least 2 full years.    So, get married, live in it and then sell it.    The married capital gain exclusion of $500k does not kick in unless the spouse has lived in your home as his/her primary residence also for at least 2 years. 
  • October 26 2013
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Due to financial gain from the sale. I have only lived her for 1 year! My tax adviser said to wait.
  • October 26 2013
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I am a Realtor working in the greater Phoenix area, so I cant represent you directly, but may be able to offer suggestions and a Realtor recommendation in your area once we know the issues.

Please explain why you can't sell for a year.  Did you get grant assistance or first time buyer assistance to buy the home or was the home in a community revitalization zone where the government helped pay for home renovation?

With that information I or otehrs might be able to offer some ideas on how to help. 
Loren
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  • October 26 2013
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Hello User 03417814,

Have you been working with an agent or Realtor to help you sell your property the past year?  Is it listed on MLS?  91% of the properties sold in Tucson, are sold thru MLS (Multiple Listing Service).

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I would encourage you to contact a couple of local agents or Realtors, see what they have to offer, and your chemistry with them.  You do have options, just that they may not be the options you want.

Best of luck.

Spirit
  • October 26 2013
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Would you care to share more?   
 
Why can't  you sell it for a year?    What would you like to do?
  • October 26 2013
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