when are proceeds from the sale of a home taxable?
If I sell my home and don't put all the proceeds toward the purchase of another home are the unused proceeds taxable?
Answers
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good wuestion
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If you have lived in the home as your primary residence for 2 of the last 5 years before you sell, you have a $250k capital gain exclusion ($500k for married couples) so you don't pay an taxes on the expemption amount, only gains above the exclusion. If you did not live their 2 out of 5 you will pay a full gain or you could possbily have a partial exemption.
If this house is not your primary residence you cannot use the expemption. If the house is a rental or partial rental you would need to treat it differntly
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If this home is your primary residence, then whether or not you put proceeds into another home is actually irrelevant. Your taxable gain on your home sale does is not dependent on if you purchase another home.
If you had gain on the home, but you lived in it for 2 of the last 5 years, and meet the other requirements, then your gain may be excluded as mention in another customers post. Here is a link that provides some information on the home sale exclusion.
If the home was an investment property (not your primary residence) than the entire gain is taxable unless you did a 1031 exchange.
