Capital Gains tax......

[OU-HSV]

.....who knows some stuff about it?

[OU-HSV]

Well then, I reckon I'll just call the tax lady :)

[yermom]

While many learned professors have abandoned hope of ever discovering the truth behind Capital Gains Tax, I for one feel that it is still a worthy cause for examination. There are many factors which influenced the development of Capital Gains Tax. While much has been written on its influence on contemporary living, Capital Gains Tax is not given the credit if deserves for inspiring many of the worlds famous painters. It is estimated that that Capital Gains Tax is thought about eight times every day by global commercial enterprises, trapped by their infamous history. Hold onto your hats as we begin a journey into Capital Gains Tax.

Social Factors

Society is a human product. When The Tygers of Pan Tang sang 'It's lonely at the top. Everybody's trying to do you in' [1] , they borrowed much from Capital Gains Tax. While the western world use a knife and fork, the Chinese use chopsticks. Of course Capital Gains Tax is quite good.

Nothing represents every day life better than Capital Gains Tax, and I mean nothing. If society has a favourite child, it is Capital Gains Tax.

Economic Factors

We no longer live in a world which barters 'I'll give you three cows for that hat, it�s lovely.' Our existance is a generation which cries 'Hat - $20.' We will study the Greek-Roman model using the median instead of the mean, where possible.

Transport
Costshttp://radioworldwide.gospelcom.net/essaygenerator/images/graph_up_3.gif


Capital Gains Tax

The statistics make it clear that Capital Gains Tax is a major market factor. My personal view is that transport costs plays in increasingly important role in the market economy. Many analysts fear a subsequent depression.

Political Factors

Posturing as concerned patriarchs, many politicians guide the electorate herd to the inevitable cattle shed of 'equal opportunity.' Comparing international relations since the end of the century can be like observing Capital Gains Taxism and post-Capital Gains Taxism.

One quote comes instantly to mind when examining this topic. I mean of course the words of one of the great political analysts Xaviera H. Amster 'You can lead a horse to water, big deal.' [2] This clearly illustrates the primary concern of those involved with Capital Gains Tax. It is a well known 'secret' that what prompted many politicians to first strive for power was Capital Gains Tax.
One of the great ironies of this age is Capital Gains Tax. Isn't it ironic, don't you think?

Conclusion

To conclude Capital Gains Tax has a special place in the heart of mankind. It sings a new song, it stimulates and never hides.

[OU-HSV]

Thanks yermom. Here's my dilema: We're selling our house here in Arkansas and making profit off the sale. What I'm trying to figure out: if I don't roll my profit into my real estate purchase in Oklahoma will I be taxed on it? If I'm not going to be taxed, it will be a better idea for me to use that profit to pay off some debt that's at higher interest rates. I called my tax lady the other day and she said that if I haven't lived in my current residence for more than 2 years, then yes I'd be taxed. (which we haven't lived here more than 2 years). But I've heard from other people that there are exceptions to this rule. I thought someone on here may have experience in this situation.

[yermom]

i really have no idea, i just thought you needed a reply ;)

why wouldn't you be taxed on it either way?

[OU-HSV]

i really have no idea, i just thought you needed a reply ;)

why wouldn't you be taxed on it either way?
Yeah, I definitely lacked a reply :D

Well, the way I understand Capital gains, (which remember my understanding is limited), if you're not making an insane profit (like 500,000+) and you've been in the residence that you're selling for more than 2 years then you won't be taxed on it. I don't know why it would work like that, but that's how I understand it to work.

[yermom]

i mean why does it matter what you do with the money? is there some exception if you are selling a primary residence to buy another or something?

[OU-HSV]

i mean why does it matter what you do with the money? is there some exception if you are selling a primary residence to buy another or something?
Yeah I think so. I think it's supposed to keep people from flip flopping property for a living to make profit all the time. Which doesn't make sense because people still do that anyways.

[sooner n houston]

Well my limited experience with CG tax goes something like this. Until two years ago if you sold your house and did not reinvest the "profit" into another house within one year you had to pay tax on that "profit". Two years ago congress passed a law to eliminate the tax for the average home owner. The exception is the person who does not stay in that home for at least two years, they have to pay the "profit" tax, if they do not reinvest that money in a new home. So my understanding is that you can take the money you invested in the house originally and put that where ever you want. You must however reinvest the "profit" portion from the sale of your house back into another house to avoid the CG tax. So if you paid $10,000 down then sold the house for $20,000 you could use the original $10,000 anyway you wanted but you must reinvest the remaining $10,000 into another house or pay taxes on it.

I will say this is just my understanding of the law and may be incorrect, thought I don't think so.

[Skysooner]

These are the basics. As long as you meet the two year rule, you don't have to reinvest anything, and the profit has to be pretty high. I just made about $70k on the home I sold, and I didn't have to do a thing. I'm investing it currently in anticipation of buying another home in a year or so.

Individuals can exclude up to $250,000 in profit from the sale of a main home (or $500,000 for a married couple) as long as you have owned the home and lived in the home for a minimum of two years. Those two years do not need to be consecutive. In the 5 years prior to the sale of the house, you need to have lived in the house for at least 24 months in that 5-year period. In other words, the home must have been your principal residence.
You can use this 2-out-of-5 year rule to exclude your profits each time you sell or exchange your main home. Generally, you can claim the exclusion only once every two years.

[Taxman71]

Basically, it is what Skysooner said. However, a partial exclusion is allowed if you fail the 2-year test and are moving due to health reasons, change of employment or various unforeseen circumstances. In this case, the exclusion is prorated based how close you were to satisfying the 2-year rule [$500k max exclusion x (# of months used/24].