answersLogoWhite

Top Answer
User Avatar
Wiki User
Answered 2008-10-31 14:36:01

If you buy a house and don't live in it and work on it for 1 or 2 years you may or may not have a tax liability when you sell it. The rule is that you must live in the home for 24 out of the past 60 months in order to sell the home and not incur a tax liability. Furthermore, if you are single you may realize a non-taxable gain up to $250,000. If you are married then your non-taxable gain extends to $500,000. If you live in the house 24 months during the course of a 5 year period of time and rent the house for the remainder of time then you will reap the tax benefits of depreciation and any other writeoffs associated with the rental.

001
๐Ÿ™
0
๐Ÿคจ
0
๐Ÿ˜ฎ
0
๐Ÿ˜‚
0
User Avatar

Your Answer

Loading...

Still Have Questions?

Related Questions

What are computer crime liabilities?

15 years in the state pen


Are payroll and benefits current assets or total assets?

Payroll and benefits are current liabilities if not yet paid and payable within one year while total assets are those amounts which includes amount usable in current year as well as in future years as well.


What is average profit?

to make the addition of two years profit which is divided by 2. the result is average profit between two years.


Why is it important to distinguish current and long term liabilities?

The timing of those liabilities. Current liabilities are due within one year while long term liabilities are due after one year. But if you have a bank loan over 4 years, you are to split the loan into the amount due within one year and put that in current liabilities with the remaining amount put in long term liabilities.


How long to keep a house before selling it?

depends on the reason you purchased it. If you are going to make a profit normally you would want to hold onto it for 2 years to avoid paying taxes on the profit.


How do you use profit in a sentence?

The business's profit grew 35% compared to last years profit.


How do you declare a house historic?

My home was built in 1911, 101 years ago how do i declare it a historic house. where do i go to do this. are there any benefits do this. thank you COLEEN Cheever


if i rent a house to own. but i decide one day to not buy the house, can't i get the money back that i accumulated through the years. ?

The only way to get money back would be to sell the house. You might even make a profit.


What is the formula for evaluating a business' goodwill?

Goodwill (by Average profit Method) = Average profit X No.of years purchaseGoodwill(by Super profit method) Normal profit = Average capital employed X Normal rate of return / 100Super profit = Actual profit- Normal profitGoodwill = Super profit x Number of years purchase (usually specified in question)


Example of non-current liabilities?

Non-current liabilities are liabilities not expected to be repaid in the next 12 months. An example of this could be a 3 year loan, the first 12 months repayments would be considered current liabilities while the final 2 years being more than 12 months into the future would be a non-current liability


What are the tax consequences of selling a house or apartment in the US?

If you live in the house for two of the five years before selling, the IRS exempts sale profit of up to 250,000 if you are single or 500,000 if you file jointly from income taxes.


Why are leases a non current liability?

Lease agreements are generally made for more than one fiscal years that's why these are non-current liabilities.


How many years was Amazon.com in business before actually making a profit?

5 Years


Can you file for unemployment benefits after 9 years?

If you have been unemployed for 9 years, you don't have a sufficient work history to qualify for benefits.


How many years do you have to be in the army to receive full benefits?

5 years


If gross profit ratio is the same for two years what is the financial position of this company?

If the gross profit ratio is the same for two years, the financial position of the company is stable. It means the company is at the same break even point as the year before, but does not constitute growth of profit.


When and why profit and loss account is dr?

Normally you'd expect it to be CR as it's an accumulation of profit over the years. However, dividends (drawings if not a company) will reduce the profit and loss account. Combine that with a few years worth of losses and it can easily become a DR balance.


What is accumulated loss?

A loss (or losses) from previous years carried forward in order to offset future earnings. This reduces the tax burden for the years with profit as the accummulated losses are deducted from the taxable profit-


Do you pay tax when you sell a house?

Maybe. If you don't sell it for a profit, there is no federal income tax. (There may be other taxes like local transfer taxes and title fees, etc.) If you sell it for a profit there may be a taxable gain. If you owned the house for two of the five years before you sold it and it was your principle residence for two of the five years before you sold it, you don't pay tax on the first $250,000 in profits ("capital gains"). If you file a joint return and your spouse also used the house as a principle residence for two of the five previous years, the first $500,000 in profits is tax-free. If you lived in the house less than two years and moved for a reason beyond your control, you may be eligible for a reduced exclusion. You can use the exclusion no more than once every two years.


How do you calcualte goodwill in partnership business?

goodwill is calculated by dividing 5 years profit average profit is multiplied by 2 and that is yhe goodwill


How many years do you have to serve in the Navy to be receive veteran benefits?

18 years


Can an ex- husband collect a benefit under an ex- wife's social security benefits at retirement time?

Benefits for a divorced spouseYour divorced spouse can get benefits on your Social Security record if the marriage lasted at least 10 years. Your divorced spouse must be 62 or older and unmarried.The amount of benefits he or she gets has no effect on the amount of benefits you or your current spouse can get.Also, if you and your ex-spouse have been divorced for at least two years and you and your ex-spouse are at least 62, he or she can get benefits even if you are not retired.Benefits for a divorced spouseYour divorced spouse can get benefits on your Social Security record if the marriage lasted at least 10 years. Your divorced spouse must be 62 or older and unmarried.The amount of benefits he or she gets has no effect on the amount of benefits you or your current spouse can get.Also, if you and your ex-spouse have been divorced for at least two years and you and your ex-spouse are at least 62, he or she can get benefits even if you are not retired.Benefits for a divorced spouseYour divorced spouse can get benefits on your Social Security record if the marriage lasted at least 10 years. Your divorced spouse must be 62 or older and unmarried.The amount of benefits he or she gets has no effect on the amount of benefits you or your current spouse can get.Also, if you and your ex-spouse have been divorced for at least two years and you and your ex-spouse are at least 62, he or she can get benefits even if you are not retired.Benefits for a divorced spouseYour divorced spouse can get benefits on your Social Security record if the marriage lasted at least 10 years. Your divorced spouse must be 62 or older and unmarried.The amount of benefits he or she gets has no effect on the amount of benefits you or your current spouse can get.Also, if you and your ex-spouse have been divorced for at least two years and you and your ex-spouse are at least 62, he or she can get benefits even if you are not retired.


What are the benefits of investing in a whole life insurance plan?

Whole life Insurance Plans has many benefits such as they give a cover up to 99 years of age. The policy holder can participate in that company's profit through increase in Sum Insured. Also, the cash value will be the same as or more than the total premium paid by insured at year 8 of policy.


would someone be entitled to military benefits after only serving 4 years and honorary dischg?

There are scholarships available - http://www.military.com/benefits/veteran-benefits/georgia-state-veterans-benefits


What does tally stands for?

I think There is no acronym for Tally For considerate we can say: T-Total A-Assets L-Liabilities L-List of Y-Years