Home Selling in 07410>Question Details

Audioatic, Both Buyer and Seller in Redford, MI

I just bought a house with cash, fixed it up, what if i sold it within 6 months, how much would i be taxed?

Asked by Audioatic, Redford, MI Mon Jul 13, 2009

I bought a house in redford, mi for 18,000 and did all the necessary work to update it and i have only owned it for 6 months, when can i sell it, and how much would i be taxed if i sold it right away?

Help the community by answering this question:

Answers

3
If you lived in it you can avoid fed income tax after 2 years.

other than that it does not matter when you sell. taxes are the same.
0 votes Thank Flag Link Mon Aug 20, 2012
This sounds like it is an investment property, so the rules are very different than if you bought this as your primary residence. The difference between your COST and the SALE PRICE for the home would probably be considered as a "capital gain" and is taxable. Cost (usually called cost basis) is the sum of your purchase price, plus all the money spent to renovate the home, including carrying costs like interest and taxes while you are fixing up the property. The sale price is the net amount you sold the property for, which is the gross sales price minus the cost to sell the home. That includes charges like any real estate commission, legal fees, real estate transfer fees and such. The net difference, or "Gain" is usually taxed at a lower rate than ordinary income. That tax rate depends on the lenght of time you owned the property, and your total income as well! This definitely is a question you want to review in detail with the tax professional who does your taxes.
0 votes Thank Flag Link Fri Jul 17, 2009
since it's not your primary residence you can't take a deduction for it anyway. so there is no difference if you sell it today or 6 months from now. The only way it would make a difference is if you lived in the home as a primary residence for 2+ years. You will need to pay a realty transfer fee though. You can calculate the exact cost on the sellers page of http://www.justjerseyrealestate.com. Good Luck to you.

Camille Miller
Broker/Owner
Follow me on Twitter @itsjersey2me for answers to more questions
0 votes Thank Flag Link Mon Jul 13, 2009
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2014 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer