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Do I have to put home-sale proceeds into another house?

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Credible Money Coach helps readers understand the costs and tax laws associated with home sales. (((Credible).

Dear and Reliable Money Coach,

I put over $ 100,000 in a bungalow for repairs. Can I deduct $ 100,000 from my sales to recoup my copayment? And if we sell a home, do we have to put that money in another home, or can we keep it? — Linda

Hello Linda, and thank you for your question. Simply put, profits (after paying mortgage and sales-related costs) are what you hold when you sell your property. You don’t have to use your revenue to buy another property.

However, unless you are eligible for tax exemption, you will have to pay capital gains tax. We’ll talk more about this later.

Use revenue from home sales

When you sell a home or investment property, there are various costs that you must cover with your income. first, Unpaid taxes Or the property lien needs to be resolved.Also, most real estate owners Mortgage to repay.. In addition, you will have to pay common closing fees such as real estate brokerage fees, ownership insurance and attorneys’ fees. Then the rest of the amount is yours to manage as you like.

Taxes when selling a house

House prices can fall during a recession such as the Great Depression, but have been highly valued in most parts of the country over time. If you sell more than you paid for an asset, including real estate, you are usually obliged to pay capital gains tax. However, if you lived in your primary home for two out of five years before selling, you will usually Capital gains tax exemption.. It allows you to exclude up to $ 250,000 from profits from your home sale, or $ 500,000 if you are married and jointly file a tax return.

To calculate capital gains on home sales, you need to calculate criteria that include purchase costs and capital improvements (such as the cost of new roofs and major renovations). Then deduct home selling costs (such as points and statutory costs), depreciation costs, and casualty losses from the selling price.

Capital gains tax rate

Capital gains tax rates range from 0% to 20%, depending on taxable income, filing status, and the length of time you own and live in your home.

If you are not sure how the sale of real estate will affect your taxes, be sure to consult a qualified tax accountant to help you understand your options and obligations.

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About the author: Laura Adams is a personal finance and small business expert, award-winning author, and Money girl, Top-notch weekly audio podcasts and blogs. She is frequently cited in the national media and millions of readers and listeners benefit from her practical financial advice. Laura’s mission is to help consumers live a better life through speeches, spokespersons and advocacy activities. She has an MBA from the University of Florida and lives in Vero Beach, Florida.Follow her LauraDAdams.com, Instagram, Facebook, twitterWhen LinkedIn..

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