If I sell my house what is an estimate income tax i would have to pay IRS on the profit.

Asked by sgnycusa, Orlando, FL Thu Jan 9, 2014

example: If property sells for 300K, loan balance 50K, my profit 250K. would i pay tax on sale price of 300K or 250K. How muchtax? any other fees etc i should be aware of?

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7
Andrew Tisel…, Agent, Clifton, NJ
Fri Jan 10, 2014
Hi

Check with the person that does your taxes but as stated for your federal tax there is none if you have lived in the home for 2 of the last 5 years for t he 1st $250k of profit for you and $500k if you are married.

For NJ as stated you may have to pay a nonresident tax at the closing. The income taxes will all depend on your other income.

NJ also charge a transfer tax of less than 1% for home less than $1million.
Let me know if I can help you further.
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Moretti Team, Agent, South Plainfield, NJ
Thu Jan 9, 2014
Dear Sgnycusa,
NJ wants to ensure they receive their appropraite dollars. I have to assume you are renting the property in Piscataway and your primary residence is in Florida. A NJ bulk-sales-tax form needs to be completed. Your real estate attorney would obtain that information. NJ also charges a transfer tax (the first 150,000.00 at a specific rate, each additional at a different rate). In the event you reside in NJ and are moving to Florida, the state of NJ may hold money in escrow to ensure your tax liability is met. With regard to your federal income tax adn any other tax liability, I would suggest you speak to your accountant as they have a better idea of your tax bracket. Please reach out to us so we can speak privately about your specific real estate needs instead of on a public forum. We can be reached at (98) 912-5298 or via email at Toni@MorettiTeam.com.
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John Sacktig, Agent, New Jersey, NJ
Thu Jan 9, 2014
I see you are in Florida, posting in Piscataway selling, So there would be a taxes taken at closing...
I would speak to the person that does your taxes to see hat you would owe as there are so many individual variables in play. But from past expereince in seeing out of state residents selling homes or people selling homes and leaving te state of NJ in selling a home....

There is no “exit tax” as so much as an estimated income tax payment on the gain paid at time of closing, its a way of assuring taxes will be collected. The payment cannot be less than 2% of the consideration received – or gross proceeds from the sale. You should be exempt if the home was your primary residence under Section 121 of the IRS code.

If you leave the state this will be collected.. BUT.. you will be able to file for the refund as long as the capital gains fall into place as noted below. At that time your tax preparer will be able to help.

Further :

Section 121 of the Internal Revenue Code

Section 121 of the Internal Revenue Code, which is often referred to as the 121 exclusion, generally allows homeowners to sell real property held (owned) and used (lived in) as their primary residence and exclude from their taxable income up to $250,000 in capital gains per homeowner, and up to $500,000 in capital gains for a married couple filing a joint income tax return.

Primary Residence
The 121 exclusion can only be used in conjunction with real property that has been held and used as the homeowner’s primary residence. It does not apply to second homes, vacation homes, or property that has been held for rental, investment or use in a trade or business.

Qualifications

Homeowners are required to have (1) owned and (2) lived in the real property as their primary residence for at least a combined total of 24 months out of the last 60 months (two out of the last five years) in order to qualify for the 121 exclusion. The 24 months does not have to be consecutive. There are certain exceptions to the 24 month requirement when a change of employment, health, military service or other “unforeseen circumstances” have occurred.

Speak to your attorney / tax person for further information, as the attorney would be the person collecting the money for the government at clising.
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sgnycusa, Home Buyer, Orlando, FL
Thu Jan 9, 2014
Thank you Cynthia and Sally. I will find an attorney.
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James Deskins, Agent, Worthington, OH
Thu Jan 9, 2014
It also depends on whether you are buying another home or pocketing the money and how much the next home costs....
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Cynthia Freu…, Agent, Warren, NJ
Thu Jan 9, 2014
Depends on your current level of income. Also depends on if it is your primary residence, depends on your age, etc . So many more variables.
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Sally Grenier, Agent, Boulder, CO
Thu Jan 9, 2014
This is a question for your CPA or tax advisor. But i'm fairly certain that if this was your primary home for at least 2 of the last 5 years, you shouldn't owe any capital gains taxes.

http://taxes.about.com/od/taxplanning/qt/home_sale_tax.htm

I am not a CPA, nor a tax attorney, and this is not legal advice.
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