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Paid Off Mortgage |
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Dear Edith, My boyfriend just sold his house and he made a profit of $17,000 after paying off the mortgage. Will he be taxed? If so what is the best way to avoid this, if possible? |
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The IRS isn’t interested in his mortgage. When he took out that loan the money wasn’t taxed as income, and paying it off has nothing to do with the calculation of his profit.
If he’s owned and occupied the house as his main home for at least two of the past five years, he can take up to $250,000 profit free of any federal or state capital gains tax.
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Edith
Originally published on September 6, 2006 |
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