Is capital gain tax charged if ALL proceeds from a property sale are rolled into a new, larger mortgage? As in - property is paid for, new mortgage assumed for a larger property, current property sold, all $$ rolled into the new mortgage.
Thank you
Sat Jun 07, 2014 1:41 am
braje Member
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Is this your primary residence? If so gains up to 250000 for single and 500000 for mfj are not taxed
Mon Jun 16, 2014 7:07 am
braje Member
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Is this your primary residence? If so gains up to 250000 for single and 500000 for mfj are not taxed
Mon Jun 16, 2014 7:07 am
Wino Senior Member
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First off, you must figure your capital gains. For instance, let's say you bought a primary residence for $100K. You made $20K in improvements, and you sold it AT LEAST 2 years later for $200K. You have a capital gain of $80K (200 - 100 - 20).
You must invest that $80K in another primary residence within 2 years (three years if you're building a new place). The original $120K is already taxed, and does not count as a capital gain, because it is merely replacing your already-spent capital. You can do whatever you want with that amount.
Any amount you DON'T reinvest in a home (of the $80K gain) is subject to long-term capital gains, which is at 15% this year.
Hope this helps.
Mon Jun 16, 2014 5:12 pm
Wino Senior Member
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The exemptions mentioned earlier are lifetime exemptions. They should be used late in life when you downsize for the final time, and not early just to avoid the 15% rate. Chances are, your regular income tax rate is higher than the capital gains rate.
Keep reinvesting the profits until near retirement, at which time you downsize and take the exemption.
Tue Jun 17, 2014 5:13 pm
blixet Preferred Member
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You don't have to buy another home with the proceeds of the sale and there is no limit on the number of times that the exclusion can be used as long as you meet the qualifying criteria.
Information is more valuable sold than used – Fischer Black
Tue Jun 17, 2014 11:00 pm
Wino Senior Member
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quote:Originally posted by blixet You don't have to buy another home with the proceeds of the sale and there is no limit on the number of times that the exclusion can be used as long as you meet the qualifying criteria.
Capital gains tax?
Can anyone tell me what rate capital gains tax is charged in percentage in the UK?
Also is this example liable for capital gains tax?
Our house is valued at £115,000 but sells for £130,000?
Fri Mar 13, 2015 5:26 pm
oldguy Senior Member
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ukrkoz - to further clarify, the mortgage doesn't come into play.
Fri Mar 13, 2015 5:38 pm
losangelescpa Member
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Capital Gains Tax is a tax on the profit when you sell (or ‘dispose of’) something (an ‘asset’) that’s increased in value.Capital gains are profits from the sale of a capital asset, such as shares of corporate stock, a business, a parcel of land, or a piece of art. Capital gains are generally included in taxable income but are often taxed at a lower rate; under current law, for example, most long-term capital gains face a top rate of 15 percent. Complicated rules impose a range of tax rates on different kinds of gains and can make it difficult for taxpayers to calculate their tax liability. It’s the gain you make that’s taxed, not the amount of money you receive.
