qwerty
Well-known member
ps9 said:
here is a link with the changes in tax rates from 2012 to 2013. look at the unearned income (medicare contribution) section
https://www.fidelity.com/viewpoints/personal-finance/taxpayers-guide
Really?
- Thread starter lovingit
- Start date
NEW -> Contingent Buyer Assistance Program
here is a link with the changes in tax rates from 2012 to 2013. look at the unearned income (medicare contribution) section
https://www.fidelity.com/viewpoints/personal-finance/taxpayers-guide
I'm a little confused, all or none? Under "Reduced Maximum Exclusion" in the link I posted above, you can take a fraction of the exclusion. Max is $500k for married filing jointly or $250k per person. If you occupy the property for less than 2 years, then you multiply the $500k by x/24 (where x = number of months you're at the property and 24 = months over 2 years). For the Tabor property, say it sells in 90 days (if at all), then the exclusion would be $500k x 8/24 or $166k tax free. Still a nice profit if they can find a sucker.
So all properties that are listed $500k over last purchase price can be a casual flipper trying to maximize his taxes. I do see a few of these, not often since it does require certain areas for it to work: Turtle Rock, Pasadena, San Marino, Arcadia, etc... also home needs to be older, built in 70s, decent size lot to allow for indoor sq foot expansion, single story helpful.
Here's one example:
http://www.redfin.com/CA/Pasadena/3780-Hampton-Rd-91107/home/7222735
So if you flip it correctly, you can potentially make $500k every 2 years. Not a bad way to live.
"To claim the exclusion, you must meet the ownership and
use tests. This means that during the 5-year period ending
on the date of the sale, you must have:
Owned the home for at least 2 years (the ownership test), and
Lived in the home as your main home for at least 2 years (the use test)."
What you are referring to relates to a home that has been owned for over 2 years but not used as a primary residence for 2 years....then you take the number of numbers that the home was occupied as a primary residence over the last 5 year and divide by 24 times the gain exemption. I did misspeak about the all or nothing of being eligible for the gain exemption...it should be for the two tests.
Forgot to mention, there is always some kind of exception (like there are with a lot of tax rules). You can get a reduced gain exemption if you don't meet either test if you have one of the 3 reasons below (see the top of page 14):
1. A change in place of employment.
2. Health.
3. Unforeseen circumstances.
So no, the flipper does not get any kind of gain exemption because they didn't pass the 2 year ownership test and didn't encounter any of 3 reasons above to sell the home (good luck to them if they try to claim reason 3).
I'm pretty sure it is a mistake.. I believe that plan started at $855K base price.
http://www.talkirvine.com/index.php/topic,2585.105.html
The last two units of the Garden Hill plan 2.. brand new and for May move-in at > $100K less (so this seller is implying they are worth > $100K than the brand new one ?? tsk tsk tsk)
http://www.redfin.com/CA/Irvine/230-Desert-Bloom-92618/home/53040076http://www.redfin.com/CA/Irvine/242-Desert-Bloom-92618/home/53337781
here is a link with the changes in tax rates from 2012 to 2013. look at the unearned income (medicare contribution) section
https://www.fidelity.com/viewpoints/personal-finance/taxpayers-guide
ps99472
New member
http://www.irs.gov/pub/irs-pdf/p523.pdfUSCTrojanCPA said:It's an all or nothing on the gain exemption, you can't prorate it. All of the gain gets treated as ordinary income since the hold period is under 1 year...so the tax could be max fed rate + max CA rate + 3.8% Ohbummer health care tax. Yup, another reason why I trade VIX options where 60% of the gains get traded as long term capital gains even if I hold them for 1 day due to them being 1265 contracts.ps9 said:
I'm a little confused, all or none? Under "Reduced Maximum Exclusion" in the link I posted above, you can take a fraction of the exclusion. Max is $500k for married filing jointly or $250k per person. If you occupy the property for less than 2 years, then you multiply the $500k by x/24 (where x = number of months you're at the property and 24 = months over 2 years). For the Tabor property, say it sells in 90 days (if at all), then the exclusion would be $500k x 8/24 or $166k tax free. Still a nice profit if they can find a sucker.
So all properties that are listed $500k over last purchase price can be a casual flipper trying to maximize his taxes. I do see a few of these, not often since it does require certain areas for it to work: Turtle Rock, Pasadena, San Marino, Arcadia, etc... also home needs to be older, built in 70s, decent size lot to allow for indoor sq foot expansion, single story helpful.
Here's one example:
http://www.redfin.com/CA/Pasadena/3780-Hampton-Rd-91107/home/7222735
So if you flip it correctly, you can potentially make $500k every 2 years. Not a bad way to live.
usctrojancpa
Well-known member
You are a little confused....you have to pass both the ownership test AND the use test to be eligible for the gain exemption (text copied from the top of page 11 in your first link):ps9 said:http://www.irs.gov/pub/irs-pdf/p523.pdfUSCTrojanCPA said:It's an all or nothing on the gain exemption, you can't prorate it. All of the gain gets treated as ordinary income since the hold period is under 1 year...so the tax could be max fed rate + max CA rate + 3.8% Ohbummer health care tax. Yup, another reason why I trade VIX options where 60% of the gains get traded as long term capital gains even if I hold them for 1 day due to them being 1265 contracts.ps9 said:
I'm a little confused, all or none? Under "Reduced Maximum Exclusion" in the link I posted above, you can take a fraction of the exclusion. Max is $500k for married filing jointly or $250k per person. If you occupy the property for less than 2 years, then you multiply the $500k by x/24 (where x = number of months you're at the property and 24 = months over 2 years). For the Tabor property, say it sells in 90 days (if at all), then the exclusion would be $500k x 8/24 or $166k tax free. Still a nice profit if they can find a sucker.
So all properties that are listed $500k over last purchase price can be a casual flipper trying to maximize his taxes. I do see a few of these, not often since it does require certain areas for it to work: Turtle Rock, Pasadena, San Marino, Arcadia, etc... also home needs to be older, built in 70s, decent size lot to allow for indoor sq foot expansion, single story helpful.
Here's one example:
http://www.redfin.com/CA/Pasadena/3780-Hampton-Rd-91107/home/7222735
So if you flip it correctly, you can potentially make $500k every 2 years. Not a bad way to live.
"To claim the exclusion, you must meet the ownership and
use tests. This means that during the 5-year period ending
on the date of the sale, you must have:
Owned the home for at least 2 years (the ownership test), and
Lived in the home as your main home for at least 2 years (the use test)."
What you are referring to relates to a home that has been owned for over 2 years but not used as a primary residence for 2 years....then you take the number of numbers that the home was occupied as a primary residence over the last 5 year and divide by 24 times the gain exemption. I did misspeak about the all or nothing of being eligible for the gain exemption...it should be for the two tests.
Forgot to mention, there is always some kind of exception (like there are with a lot of tax rules). You can get a reduced gain exemption if you don't meet either test if you have one of the 3 reasons below (see the top of page 14):
1. A change in place of employment.
2. Health.
3. Unforeseen circumstances.
So no, the flipper does not get any kind of gain exemption because they didn't pass the 2 year ownership test and didn't encounter any of 3 reasons above to sell the home (good luck to them if they try to claim reason 3).
Here is another one, trying to double in 1 yearhttp://www.redfin.com/CA/Irvine/145-Desert-Bloom-92618/home/45353521
I didnt know these models were only $660k in 2013? They look like KB Home.
I didnt know these models were only $660k in 2013? They look like KB Home.
lovingit said:
I'm pretty sure it is a mistake.. I believe that plan started at $855K base price.
http://www.talkirvine.com/index.php/topic,2585.105.html
The last two units of the Garden Hill plan 2.. brand new and for May move-in at > $100K less (so this seller is implying they are worth > $100K than the brand new one ?? tsk tsk tsk)
http://www.redfin.com/CA/Irvine/230-Desert-Bloom-92618/home/53040076http://www.redfin.com/CA/Irvine/242-Desert-Bloom-92618/home/53337781