“We bought a new condo a year and a half ago. We just had a baby and want to sell and get into a house. Well make 0K profit after expenses. My question is whether we must wait until the two year mark before we sell so that we can avoid paying taxes on our gain?”
***ANSWER:
Great question!
For the full exemption, you must own and live in your home as your “principal residence” for at least 2 of the past 5 years. There are exceptions in which you can get a partial tax exemption. These exceptions include certain unforeseen changes in job, health, finances, family status, or family responsibility (including multiple births or caring for a relative).
If you sell your condo now, you’ll pay up to 24.3% in taxes (15% fed & 9.3% Calif.) on your gain or profit. Many people confuse “profit” with “net”, but theyre not the same.
In most cases, here’s how you figure out your profit:
Sale Price
– Purchase Price
– Purchase Costs
– Improvements
– Selling Costs
————————
= PROFIT
If you need more info on whether you qualify for any of the exemptions, want to discuss selling your home, or have other questions, call or email me…
