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Since 1998, most people haven't had to worry about owing taxes when they sell their home, even if they clear a hefty profit when they do so. There's no longer any need to buy another house to roll ...
States that do not tax income (Alaska, Florida, Nevada, South Dakota, Texas, and Wyoming) do not tax capital gains either, nor do two (New Hampshire and Tennessee) that do or did tax only income from dividends and interest. Washington state does not collect income taxes but has passed a CG tax as an excise (rather than income or property) tax. [17]
A gain realized on the sale of other real estate held at least 30 years, however, is not taxable, although this will become subject to 15.5% social security taxes as of 2012. (There is a sliding scale for non-principal residence property owned for between 22 and 30 years.)
Basis (or cost basis), as used in United States tax law, is the original cost of property, adjusted for factors such as depreciation.When a property is sold, the taxpayer pays/(saves) taxes on a capital gain/(loss) that equals the amount realized on the sale minus the sold property's basis.
However, homeowners typically receive a warning via certified mail, and paying the taxes in full before the sale prevents the property from being sold. McElroy's case is different — she was ...
If the tax is not paid within a specified period of time (including additional interest, penalties, and costs), a tax sale is held, which may result in either 1) the actual sale of a property, or 2) a lien sold to a third party, who (after another specified period of time) may take action to claim the property, or force a later sale to redeem ...
All told, Koetter owed the government $3,863.40, which included her initial tax debt, as well as penalties, interest, and fees. She does not contest she was obligated to pay that.
The facts in Cottage Savings present an example of realization occurring when property is exchanged for property. Cottage Savings Association (CSA) sold interest in home mortgages to four savings and loans associations. [6] At the same time, CSA bought interest in mortgages held by the same four savings and loans associations. [7] "The fair ...