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02-19-2005, 07:44 AM
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#1
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Montana Fan
Join Date: Dec 2003
Location: Marinette
Posts: 238
M.O.C. #735
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Taxes
Does anybody know if you have to pay capital gains taxes on the sale of your home? My home is in Wisconsin and I'm a resident of South Dakota. Do I have to pay any taxes to these states or the IRS? Thanks in advance for all answers.
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02-19-2005, 12:17 PM
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#2
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Montana Master
Join Date: Jul 2003
Location: Clearwater
Posts: 10,917
M.O.C. #420
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You have an exclusion of over $100,000 profit on the sale of your home with the IRS. As each state is different I cannot answer for Wisconsin. But as SD has no income tax there would be nothing there to pay.
Lorraine
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02-19-2005, 12:19 PM
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#3
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Montana Master
Join Date: Jul 2003
Location: Clearwater
Posts: 10,917
M.O.C. #420
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Please take note that LORRAINE posted that reply and not I.
That is the first time she has posted a single word on this forum.
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02-19-2005, 12:29 PM
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#4
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Montana Master
Join Date: Nov 2003
Location: Drexel Hill
Posts: 897
M.O.C. #627
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Well great first post Lorriane.I guess we all know who does the taxes in their household.I can see Glenn smiling
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02-19-2005, 01:26 PM
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#5
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Montana Master
Join Date: May 2004
Location: Fort Wayne
Posts: 689
M.O.C. #1536
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If you are over 55 you have the exception
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02-19-2005, 01:41 PM
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#6
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Montana Master
Join Date: Dec 2003
Location: Chandler
Posts: 624
M.O.C. #740
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Lorraine,
Didn't you mean, You have a one time exclusion of up to $100,000 if over 55 yrs. old?
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02-19-2005, 01:55 PM
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#7
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Montana Master
Join Date: Jul 2003
Location: Clearwater
Posts: 10,917
M.O.C. #420
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Quote:
quote:Originally posted by azstar
Lorraine,
Didn't you mean, You have a one time exclusion of up to $100,000 if over 55 yrs. old?
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No it was changed. There is no longer a one time exclusion regardless of age.
Go to irs.gov
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02-19-2005, 01:59 PM
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#8
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Montana Master
Join Date: Dec 2003
Location: Chandler
Posts: 624
M.O.C. #740
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WOW, Lorraine thats bad news,
Thanks (I think)
Happy Camping
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02-20-2005, 02:54 AM
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#9
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Montana Master
Join Date: Jul 2003
Location: Clearwater
Posts: 10,917
M.O.C. #420
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This is a difficult tax issue to explain on a forum so I suggest you go to the IRS web site and read Publication 523.
IRS Publication 523
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02-20-2005, 03:13 AM
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#10
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Montana Master
Join Date: Oct 2003
Location: Malta
Posts: 3,075
M.O.C. #607
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that's why I never even try to do my own taxes...alot less headache to let someone do them for me!
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02-20-2005, 05:13 AM
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#11
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Montana Fan
Join Date: Aug 2003
Posts: 470
M.O.C. #447
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There is an "urban myth" in Canada that we are taxed more highly than our US friends. I have felt for years that this is just an "urban myth" and reality is that both Governments (and the various levels of Governement) have their hands well and truly in our pockets.
Having just read IRS Publication 523 I am even more grateful that I live in, and pay taxes in, Canada - this is such a typical IRS publication i.e. almost impossible to interpret. Being a tax accountant I am well used to reading the Canadian versions of these publications (up here they are called Canada Revenue Agency Interpretation Bulletins) and, let me just say, I now have a $&*%($)ing headache from reading the IRS version!
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02-20-2005, 05:36 AM
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#12
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Montana Master
Join Date: Nov 2002
Location: Oceanside
Posts: 20,028
M.O.C. #20
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Azstar, I think what Lorraine is saying is the exclusion is still there but now it's for everybody rather than just for those 55 and older. We paid no tax on the sale of our home in early 2003.
I thought there is an upper limit, though, of something like 600k profit, maybe more, but maybe that's changed too?
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02-20-2005, 06:22 AM
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#13
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Montana Master
Join Date: May 2004
Location: Fort Wayne
Posts: 689
M.O.C. #1536
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The limit is 250,000 for single and 500,000 for married folks. My mother sold her house last year and I did her federal with turbo tax and it just did everything all I had to do was put in the figures so didn't need to know what the limit was and she is 90 so way past any age limit.
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02-20-2005, 07:07 AM
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#14
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Montana Master
Join Date: Jul 2003
Location: Clearwater
Posts: 10,917
M.O.C. #420
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02-20-2005, 09:42 AM
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#15
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Montana Fan
Join Date: Aug 2003
Posts: 470
M.O.C. #447
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Glenn - you are selling Lorraine too cheap!
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02-20-2005, 11:19 AM
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#16
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Montana Master
Join Date: Aug 2004
Location: Fallon
Posts: 6,064
M.O.C. #1989
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I agree. Glenn, that is way too cheap. I am an accountant and I do our taxes (I used to do others). I use Tax Cut and like Turbo it really does it all for you. About the only time you need someone else is if you have a lot of complicated investments or a trust. We had our own business for years and I did our taxes for that on Tax Cut also. Don't want to lose business for our tax consultants but I also hate to waste money. One year a guy paid me to do the Easy form. The reason - he got all shaky and sweaty everytime he looked at an IRS form no matter how simple!
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02-20-2005, 12:20 PM
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#17
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Montana Master
Join Date: Jul 2003
Location: Clearwater
Posts: 10,917
M.O.C. #420
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Hey I'm just tryin to give ya'll a break, Afterall you are like family to us.
Back in New York Lorraine also had her own Lorraine Adams Accounting Services. Since going full time she pretty much gave most of her accounts to her previous employer. In addition to the accounting she also was a tax consultant and instructor for Quick Books and Peachtree. This winter, rather than workcamping for additional income she took a position with H&R Block and she actually seems to be enjoying it. With H&R she is not under near the pressure she had when she had her own business.
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02-20-2005, 01:07 PM
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#18
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Montana Fan
Join Date: Feb 2005
Location: Virginia Beach, VA
Posts: 328
M.O.C. #3149
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I am about to go through this so I have pretty much researched it. Incidently, I always do my own taxes, using turbo tax. Twice I went to a "professional" and both times they missed deductions and would not allow things the publications clearly allowed because they said they would lose their liscense if they were audited. So I didn't pay them and did my own. I have been audtited twice and both times IRS agreed with my interpretations.
Now as to the question. In 2004 or after (indexed for inflation) you do not need to report any capital gain of less than $250,000 ($500,000 married filing jointly). A house must be your primary residence and you must life in it two years, or so. The 250/500 thousand is a life time exclusion so you have to add all the capital gains you might have gotten from multiple sales through the years.
That is the way I read it and so does my broker and my borther in law who is a financila advisor. But please call the IRS. By the way, record their answer (tell them you are recording it). It makes some of them squirrelly.
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02-20-2005, 04:09 PM
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#19
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Montana Master
Join Date: Aug 2004
Location: Livermore
Posts: 5,183
M.O.C. #1920
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I had TurboTax out tonight doing my two son's taxes and started mine. Got too discouraged by the theory of large numbers (what I owe) and decided I'd wait until I had all of my deduction stuff ready so I didn't blow a gasket. I agree that the tax software makes it a lot easier. Used to make Lotus (remember that) and built my own tax software from the forms. Now TurboTax keeps a running tab of Owed/Refund.
__________________
Ron and Terrie Ames plus Meg - MOC #1920/KF0NTA
2021Montana 3230CK Super Solar+ Legacy Package
2021 Ram 3500 Laramie Longhorn, BIM Charging
4x4, SRW, LB, Crew Cab, Pullrite 3900 Hitch
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02-21-2005, 04:47 AM
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#20
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Montana Master
Join Date: Nov 2002
Location: Oceanside
Posts: 20,028
M.O.C. #20
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Y'all know, don't you, that interest on your FW loan is deductible since the FW is considered a second home, or a primary home if you are fulltiming. There are probably some caveats, such as it has to fully self-contained (I think), so be sure to check the regulations.
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