Hi All,
I've been getting different answers from different people on this. Want your insights.
Scenario:
You buy a house. Live in it for 6 months. Market changes and it becomes a total seller's market.
Neighbor houses are selling like hot cakes for $20k-$45k more than what you bought it for.
If you sell that house and make a $20k+ profit on it, do you have to pay taxes on that chunk of change, or can you keep all profits?
So far I've heard:
- Yes, you pay no taxes on profits up to $2xx,xxx (some high number depending on dif. factors like single, married, etc.)
- No, you had to have lived in it for at least X number of years first, anything less and you must pay taxes on that profit.
- Yes, as long as you use that profit on your next home purchase (which you live in) within X time.
Anyone have any answers on this? It's a big determining factor on whether or not I will be selling my house or not and other future plans.
Ideally, I'd like to sell it for a profit, then use that cash as a down payment on a 4plex (owner occupied investment).
