Capital Gains Tax On Florida Home Sale While California
Q: I bought a home in Miami Florida in 1992 for $125K. I did this for a friend who would not qualify so I purchased the home, he lived there and made the payments with the idea that he would fix his credit and buy the house from me. I never lived in the home and later moved to California 2002. Now my friend is ready to buy the house (finally), but the value has gone up to $230K and the current loan is at $180K. If we transfer the home at a price of $180K, what capital gains would I be required to pay? Im not sure Florida taxes this, but because I now live in California, would they tax me as well? Doesn't anyone know what the IRS tax rate would be?
I thought about simply adding the taxes into the price of the home, but the more I add in, the more it seems I'll be taxed! Any advise is greatly appreciated!
A: > I bought a home in Miami Florida in 1992 for $125K. I did this for a > friend who would not qualify so I purchased the home, he lived there > and made the payments with the idea that he would fix his credit and > buy the house from me. I never lived in the home and later moved to > California 2002. Now my friend is ready to buy the house (finally), > but the value has gone up to $230K and the current loan is at $180K. > If we transfer the home at a price of $180K, what capital gains would I > be required to pay? You would have a taxable long-term capital gain of roughly $55,000. (See IRS Publications 550 and 551 for adjustments to basis and expenses of sale.) This will probably be taxed at 15%. >Im not sure Florida taxes this, but because I now > live in California, would they tax me as well? Doesn't anyone know > what the IRS tax rate would be? AFAIK this wouldn't be taxable for FL. CA will tax the gain. You would also have a Federal gift tax responsibility for the difference between the current FMV and the sale price. You'd need to file Form 709 and use some of your lifetime unified credit. .
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