property sale and taxes
#1
property sale and taxes
Just decided to down size a little - House is too big and with hubby working away all week and big garden to deal with after living in our house for 8 months we might sell and look for something a tad smaller - the realtor came round and said that after her fees ???? she thinks we might make a small profit of around 10- 15 K. I read somewhere that if you sell your property within first 2 years of living in it unless you have a good reason i.e have to move for job purposes you have to pay a tax on your profit.
Has anyone else heard this? or knows of the ways of getting around it?
Is it just Colorado Law?
Thanks
Issy
Has anyone else heard this? or knows of the ways of getting around it?
Is it just Colorado Law?
Thanks
Issy
#2
Lost in BE Cyberspace
Joined: Jan 2006
Location: San Francisco
Posts: 12,852
Re: property sale and taxes
Just decided to down size a little - House is too big and with hubby working away all week and big garden to deal with after living in our house for 8 months we might sell and look for something a tad smaller - the realtor came round and said that after her fees ???? she thinks we might make a small profit of around 10- 15 K. I read somewhere that if you sell your property within first 2 years of living in it unless you have a good reason i.e have to move for job purposes you have to pay a tax on your profit.
Has anyone else heard this? or knows of the ways of getting around it?
Is it just Colorado Law?
Thanks
Issy
Has anyone else heard this? or knows of the ways of getting around it?
Is it just Colorado Law?
Thanks
Issy
Last edited by Giantaxe; Mar 25th 2008 at 1:49 am.
#3
Re: property sale and taxes
Just decided to down size a little - House is too big and with hubby working away all week and big garden to deal with after living in our house for 8 months we might sell and look for something a tad smaller - the realtor came round and said that after her fees ???? she thinks we might make a small profit of around 10- 15 K. I read somewhere that if you sell your property within first 2 years of living in it unless you have a good reason i.e have to move for job purposes you have to pay a tax on your profit.
Has anyone else heard this? or knows of the ways of getting around it?
Is it just Colorado Law?
Thanks
Issy
Has anyone else heard this? or knows of the ways of getting around it?
Is it just Colorado Law?
Thanks
Issy
Hi Issy
Good to hear you're still around! Unfortunately its true. If you had lived in the place as your primary residence for 2 of the previous 5 years then one may be exempt from cap gains etc.. but at a CO level, you need to double check to be safe etc. There may be exemptions to the rule if its w/in the 2 years based on work etc but you must fit the criteria (eg more than 50 miles etc) but the dreaded IRS is the authority on it. You might find that costs of which could be deductable.
If you go out of state, CO may withhold 3% for tax purposes... if you go overseas, CO may hold upto 10% for tax purposes (to ensure you don't skip on them). That is one thing which people overlook and forget about and sometimes find a nasty surprise.
Now, if you were to do a swap - like for like - then you aren't subject to anything. But you can't just 'pretend' that the prices are the same because authorities aren't that stupid. Again, verify and check with tax professional
#4
Account Closed
Joined: Mar 2004
Posts: 2
Re: property sale and taxes
Where in Colorado can you make 6% or so plus cash in 8 months?
Unless you got a stunning deal when you bought, I doubt tax will be an issue.
Unless you got a stunning deal when you bought, I doubt tax will be an issue.
#5
Re: property sale and taxes
We are up North nr Fort Collins bought the house from an eldery couple and got a huge deal considerably less than asking price and have been working at the property modenising for last 8 months internally and externally.
So if we can offset the profit from what we have actually spent on it we might be OK.
Of course there is no saying the property will sell in this climate but around here everything that goes on the market seems to be selling for nr asking within around 60 to 90 days.
Thanks tho your answers help maybe just hang on for another yr or so.
Issy
So if we can offset the profit from what we have actually spent on it we might be OK.
Of course there is no saying the property will sell in this climate but around here everything that goes on the market seems to be selling for nr asking within around 60 to 90 days.
Thanks tho your answers help maybe just hang on for another yr or so.
Issy
#6
BE Forum Addict
Joined: Mar 2007
Posts: 4,059
Re: property sale and taxes
I would be very skeptical of this prediction. If the realtor were saying large profit, I might look forward to small profit/break even. Since the realtor is saying maybe small profit, I would expect to take a loss. It's very difficult to make a profit in 8 months unless you bought a dump and improved it.
#7
Account Closed
Joined: Mar 2004
Posts: 2
Re: property sale and taxes
Fort Collins is not that far away, my advice would be:
Speak to several agents, believe nothing.
Check yourself, recent sales information should be provided by Reators, have a look, get a view on how the houses compar with yours.
http://www.coloproperty.com/ is the site I used for property on the MLS.
60 to 90 days seems very short for the Front Range, it can happen individually but not as an average. It does depend of course on recise location and price bracket, higher value properties can stick a long time so I am assuming mid market. A realtor should provide all this info as part of their pitch.
Go and have a look at your competition, pretend you were a buyer what would you be comparing with, get your Realtor to take you around.
Speak to several agents, believe nothing.
Check yourself, recent sales information should be provided by Reators, have a look, get a view on how the houses compar with yours.
http://www.coloproperty.com/ is the site I used for property on the MLS.
60 to 90 days seems very short for the Front Range, it can happen individually but not as an average. It does depend of course on recise location and price bracket, higher value properties can stick a long time so I am assuming mid market. A realtor should provide all this info as part of their pitch.
Go and have a look at your competition, pretend you were a buyer what would you be comparing with, get your Realtor to take you around.
#8
Re: property sale and taxes
Perhaps moving now could make sense if the difference in mortgage payments between that and a smaller property would more than offset any tax implications?