Date: Fri, 13 Aug 2004
I bought my home in California on January 30, 2003 and am considering selling it. I know that it is better to wait the full 2 years before selling for tax reasons.
I heard that if you are close enough to the 2 years that they will prorate the exemption. Is that correct? I would like to sell soon but with the market cooling off here and homes now sitting on the market, I don't want to wait, but I don't want to get slammed with taxes.
We owe $264,000 on our house and we will market it for $470,000.
Date: Wed, 01 Sep 2004
Unless you qualify for the "unforeseen circumstances" exception, there is no prorata of the exemption.
You haven't given me enough information to determine what the tax might be for selling your home. Your gain is probably the sales price minus the cost minus selling expenses. You have to "guess" whether the market value of the home will decrease more than the tax you would have to pay.
Where are you going to live after you sell the home? Aren't you going to be playing the same game with the replacement residence?
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