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Selling Her Condo |
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Hi, my wife and I own a condo and are now thinking about selling. The condo is in my wife's name. We have been married for about four years now. The question is if we sell the condo and make a profit as we should, is that profit going to be taxed and if so how much? Or can we use that profit to buy another property without penalty? We now live in a house that I owned before we married. Bottom line is we want to sell both our properties and use both profits to buy a bigger home. Any suggestions?? Thank you for your help |
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If your wife has been out of the condo for more than three years before she sells, she will not qualify to use the homesellers exclusion, which would let her take up to $250,000 capital gain free of federal tax.
If she's been renting out the condo, and wanted to buy another rental property, you could arrange (ahead of time) a Section 1031 tax-deferred exchange. But it sounds as if you don't want to do that with the proceeds anyhow. And there is no replacement-property tax break for residences these days.
If it's any consolation, capital gains tax these days is no more than 15 percent federal, less than that state. They do let you keep most of it. But if the condo has been rented, past deprecation will be recaptured at 25 percent. A tax professional can explain it all.Section |
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Edith
Originally published on September 6, 2007 |
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