tax law question - Posted by Helen

Posted by JHyre in Ohio on April 20, 2002 at 05:57:20:

Your question is a bit vague. You incur taxes on the rents paid from renting your old residence. You may also incur taxes on the sale of rental…if it’s sold three years or more after you move out of it, you incur taxes on the entire sale amount. If sold before that, you only pay tax to the extent that you’ve depreciated the home, at a 25% rate. For example, if you sell it two years from now for a $50,000 gain and had taken $7,000 in depreciation on it, you’d pay $1,750 in taxes (.25 x $7,000). If it sold > 3 years from renting it out, you’d pay tax on the entire $50,000 gain.

John Hyre

tax law question - Posted by Helen

Posted by Helen on April 19, 2002 at 17:06:45:

If you sell your home and begin renting how long do you have to buy another house without incurring taxes? Not sure if it makes any difference, but the people involved in this scenerio make less than 100K per year.