Tax Law (Questions About Taxes)/Selling home

Advertisement

Expert: John Stancil, CPA - 11/3/2009


Question
My wife and I bought a house in Maryland in 1986.  We want to sell it in July 2010.  In 2000 I moved overseas and never returned.  My wife joined me in August 2006.  So I don't meet the 2-out-of-5 year rule.  My wife will meet the use rule 1-year out of 5.  So no exclusion.  

We both returned to the States in 2007, but now rent a house in Florida.  And although I moved to Europe and now Florida for a new job, I don't think I qualify for the exception.  So I believe we must pay capital gains.

But what if we put the entire profit from the sale of our house into a new house in Florida that we will live in full time.  Does that no longer count for anything?

Thank you!

Answer
Scott,

Thanks for your question.

It does not matter what you do with the proceeds, it does not affect the taxability of your profits.  Up until 1986, you could do that, but the current law on the sale of your home repealed that part.

Hope this helps.

John Stancil, CPA

Tax Law (Questions About Taxes)

All Answers

Answers by Expert:

Ask Experts

Volunteer

John Stancil, CPA

Expertise

I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I teach tax and accounting at a small church-related college. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a part time tax practice for over 35 years. I am a member of the AICPA, National Association of Tax Professionals, and the Institute of Management Accountants. Visit my website at www.johnstancilcpa.com. Also visit my blog, www.thetaxdocspot.com. Prepare and file your own taxes at www.1040stancilcpa.com

Experience

I hold a doctorate in Accounting, and four professional certifications: CPA, CMA, CGMA, and CFM. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 30 years and have taught accounting and tax at the college level for over 30 years.

Organizations
AICPA, FICPA, IMA, NATP

Publications
The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill College

©2012 About.com, a part of The New York Times Company. All rights reserved.