Mar
30
How long to sell house after buying new one?
By
I have purchased a new house and will be moving in a month. I have lived in my current primary residence for 5 years. This house is not ready to sell so the question is how long do I have to fix it up and move it on before capital gains tax is an issue?
Also would having my child live in the house while fixing it be an issue? we are willing to consider any arrangement as money is not currently my main concern so rent/board/stay without cost are all ok. The least complex solution is preferable.
Thanks for any help, this is the first house I have sold.
I am in Australia
Just adding, my son is currently studying so will not be able to make the move for another 6 to 12 months. Staying in our current house isnt essential after a certain time however I am not ready to sell this house yet as it requires some work.
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3 Comments
April 1st, 2010 at 2:07 pm
it might depend where u live.
but in aus its 3 months
April 3rd, 2010 at 11:22 pm
First you have three years to sell the house before facing capitial gains in most cases. But, make sure you don’t cut it to close…even if it isn’t your fault…there are no exceptions for going over that time frame.
Now, if you child is living there and you can’t prove that it is for your convience then you might have to claim a bit of rent.
This is assuming that it is US Tax rules.
April 6th, 2010 at 1:46 pm
In the current market, it seems to me that even if you listed your home today, it would take some time for it to sell. You long ago met the 2-year rule of using the home as a primary residence in order to avoid the capital gains tax. I guess what your concern is here is that if you hold your home for too long it will change its status to being a ’second home’ and then be subject to capital gains. Your best bet so that you can be sure of your options, therefore, is to call or go on the website of the IRS and get the information you need right from the horse’s mouth. The website is extremely informative, but can be a little daunting when trying to find the exact situation you need explained. I, personally, call the IRS on the phone when I have these questions. The agents are very helpful, polite, and will help you (for free) by telling you your options and the tax implications of your choices. They will also send you any brochures relevant to your situation so that you have exactly the information you need to make a decision. Just relax and don’t be afraid to call them — they are extremely ‘user friendly’ and sympathetic to your needs — they are taxpayers too, and your calls give them job security!