How does a second mortgage impact capital gains tax on the sell of you your home?
80565
The amount of the mortgage(s) does not affect the capital gain.  Gain is determined by the difference between the net sales price and your basis in the house.  In most cases in which you have lived in the house for two of the past five years, the gain is not taxable.
358266
If it's your main residence and you live in the UK no. If it's not your main residence you pay capital gains tax. You have an allowance for capital gains for the year 2006 to 2007 of £8,800 so you pay tax on a gain over that. you should also adjust for the effects of inflation - check the finance pages on TV teletext - there used to be a chart for that on there - not sure if there still is. Outside the UK the tax rules are probably similar - ask your local IRS office. Incidentally, capital gains applies to the sale of a copyright so if you write a magazine feature in the UK and get paid up to £8,800 in this financial year - you won't pay tax on it. Assuming you haven't used your allowance for something else. Capital gains tax does not apply to cars, household furniture, etc. Basically, stuff that goes down in value normally. So you can't offset the loss on a car against a gain. But a gain on a car is tax free (as long as you don't sell them as a business).\n\nThat is one hell of a top answer! 10 points!
270048
Yes if you sold the house and made a profit it is taxable. however if you inherited the house from him, i.e. he left it to you, then you don't pay taxes on it if:\n\n1)you get it appraised and get a Fair Market Value of the house.\n\n2)you then sell the house at the Fair Market Value. \n\nInherited properties are only taxed as captial gains if you sell them at above the Fair Market Value. Plus, the appraisal fees to get the property appraised can be deducted on your taxes(as long as you itemize).
594827
It won't mean much for me, except maybe lower property taxes.  As long as you're not planning on selling, it's kind of like a drop in the stock market.  The price doesn't matter until you sell.\n\nTami T - I would be concerned about a 15% drop, unless you had a big down payment.  You could end up upside-down on your mortgage and if you HAD to sell (lay-off, relocation), you would end up still owing the bank for a house you don't own anymore.  And I'm sure they'll want that at closing.
1135699
That depends.  If it was your principal residence, and if you lived in it for 2 out of the last 5 years immediately prior to the sale, then you may exclude up to $250,000 ($500,000 if married filing jointly) in gain from federal taxes.  Excess gains are taxed as capital gains, as is the entire gain if you don't meet the ownership, residency and/or occupancy conditions.\n\nCA law may vary on that.  Consult a tax advisor in CA for full details.
226979
It all depends on whose name is on the deed and mortgage.  If it's in one name, then the person who is named is responsible.  If you both are on it, then it's just like selling the house when you are married, just split the profit evenly.  If the deed is in one name and the mortgage is in both names, then the one on the mortgage who is not on the deed may get screwed, because that person has no ownership in the property, but is still responsible for the mortgage.  Don't sell it too cheap, because courts will look at sale prices and actual value and they tend to get upset if you sell a $150,000 for $50,000.
878425
You only pay capital gains on PROFIT, not gross proceeds. If you come out at 0, you dont have to worry about capital gains. \n\nI bought house for $152, sold it at $167, and only paid capital gains on about $5K becuase that was all the profit I made on the deal. \n\nAs long as you keep your paperwork to show that the cash you're getting back is your down payment and not profit (hang onto your original closing statement) then the 1031 exchange is a moot point.
379215
if you've lived in your current principle residence for at least 2 years out of last 5 years, then you have $250k tax free capital gain (or $500k for married couple). any gains over this amount will be taxed regardless whether you invest in another house or not.
432095
Are you asking if you can deduct interest that is not your legal responsibility?  If the mortgage is not in your name, you can't.\n\nIf you are asking if you can live in an rented apartment and deduct second home interest, you can - so long as you own the mortgage.\n\nMike's answer for the other scenario is good.
772399
Yes.  You have to pay capital gains taxes on those sales if you make a profit.  They are reported on Schedule D.  If they are held longer than 1 year, the tax is approximately 1/2 your regular tax rate.  Losses can be subtracted from gains.
1065039
I think it sort of depends.  I have a $40,000 2nd morgage that was adjustable at 8.75%.  This interest rate has been rising over the last year or so and may be continue to rise.  The question that I asked is whether I can make 8.75% on the money that I put into my Roth ira.  If you a stock wiz and know you will make more then 8.75% on the money in roth I would put the money in the roth.  For me I felt that a 8.75% return was guaranteed and safe (I am sort of moderate risk category)  by paying down my 2nd mortage.  \n\nYes I am not taking in account the tax advantage of 1)mortgage tax deduction and 2)tax free on capital gains on my roth.\n\nI like the idea of taking my money, paying down my 2nd mortgage and saving 8.75%.
874327
I think a couple of people may have missed the fact that you said this is an INVESTMENT property.  If this is your personal residence the answer is, indeed, no. (and since you referred to the 2 out of 5 rule you may have just misspoken when you said investment because that rule ONLY refers to primary residences). However if this was an investment and you lived somewhere else than you can take a capital loss. (If there was personal use AT ALL of the property it is NOT an investment). All of your improvements will be added to basis to possibly increase your loss.  Please keep in mind that your capital losses can offset your capital gains and then go to a maximum $3000 ($1500 if MFS).  Any excess loss will be a carryover loss to be used in future years.
111045
You need to talk to your realestate agent and your accountant. There is a program that protects you from this tax. If you buy the new property within  2 years of the sale of the old property, you pay Capitol Gains Tax. It's called Property Exchange and you only pay 25% capitol gains on the balance from one property to the other. Example: you sell for 50,000 and buy for 40,000, you pay capitol gains tax on 10,000.\n\nGood Luck!
1084312
that's a great question - I'll be doing that in two years....Obviously, you can't depreciate primary residence....if your rental property becomes your primary for 24 months in a 5 year period, when you sell w/in that 5 yr period, you get the Capital gains exemption and just lose all the rental deductions you "enjoyed" to date.
647864
First of all, it depends on when you inherited it and when you are selling it.\n\nYour "basis" in the property is what it was worth at the time of the death of the person you inherited it from.\n\nIf that was a while ago, the property may have increased in value.  If it was recently, or in an area not experiencing increased value since you inherited, it may be at or near the same value as your "basis" at the time of their death.\n\nThe difference between your "basis" and the current sales price of the property is called the "capital gain" and it is all that you will be taxed on.\n\nEXAMPLES  \n\nIf value @ death was $35,000.00 and you are selling for $35,000.00 - NO TAX (no gain because the basis is as same as the sales price)\n\nIf value @ death was $25,000.00 and you are selling for $35,000.00 - $10,000 Taxable Capital Gain\n\nAs for the tax rates, that is where my expertise pretty much ends.\n\nThere are Long Term Capital Gains and Short Term Capital Gains, and I do not know the length of time for each, nor whether or not there is a difference because the property was inherited and not purchased.  They are taxed at different rates, and those rates have nothing to do with your income level or any other particulars other than the time the capital asset (the property) was held by you. \n\nFor this you will need to speak to an accountant or tax advisor, but I hope you have a better understanding now of what questions to ask to get a complete answer from them.\n\nGood luck and take care.
477715
If your second mortgage is in foreclosure then there would be a lis pendens filed against your property, which prohibits the sale until the mortgage is either brought current or the property is foreclosed upon. You will have to call the company that you have your second with to find out for sure.
872943
The only thing you can deduct from your tax is probably your mortgage interest. Individual items in the closing statement may be deductible when you sell the house.