Profile picture for RJ Dake

We moved out of our home almost three years ago ... what are the current capital gains rules?

Were recently able to lift the HELOC on the home and can now sell. The home is worth far more than we initially paid and slightly more than the remaining loan, but less than the combination of debt. We've paid HOA dues, taxes, etc but don't know the rules on current Capital Gains in this context ... feedback and tax ideas are appreciated.
  • October 13 2010 - Staten Island
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Answers (3)

Profile picture for Robert.Northfield

You should consult your tax professional. Did you use the property as a rental property since you moved out? If the answer is yes, you may owe capital gain on the difference of the net sales price minus your basis in the property (cost basis + capital improvements) You can't deduct the HOA dues you paid, taxes,etc. If you owned the property for over few years, your long term capital gain could be 15%. Rules and rates may have changed so please consult with your tax professional.

  • October 13 2010
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Profile picture for wetdawgs

It must be your primary residence for >/=2 of the last five years.   Exclusion of $500k for a married couple (both of whom must have lived in it 2 of the last five years).   If you are approaching three years, you have to have closed  on the selling process before the three years is up.   Three years and a day after you moved out you will lose the gains exclusion.

If you've written off anything related to rented it, you will need to work with a CPA because rental deductions/write offs to affect the capital gains.

  • October 13 2010
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Profile picture for nealadler
I believe the capital gains exemption for married couples is for the first $500,000 and for single people $250,000.  You also have to have lived in the house for 2 out of the last 5 years.  However, the rules may have changed.  If it is an investment property you may wish to sell the house and do a 1031 tax deferred exchange. All situations are different. However, all of this aside, I would recommend you contact a tax professional to provide you with the appropriate advice. 
  • October 13 2010
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