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Tax question regarding use of home equity money after sale?

Discussion in 'The Okie Corral' started by lonewolf01, Feb 13, 2010.

  1. lonewolf01

    lonewolf01

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    We're getting ready to move and I have approx. $120K in equity in my home. What are the tax implications if I don't sink the whole equity into my new home but keep ~$20K out for savings?
     
  2. RenoF250

    RenoF250

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  3. AAshooter

    AAshooter

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    I think you need to provide more details. For example, you could purchase a more expensive home without putting the $120,000 of equity in your previous home. Perhaps only using half of that amount to cover the down payment.

    Or, are you planning on purchasing a cheaper home and pocketing your profits. When it comes to taxes, it is all in the details.
     
  4. hyperstyx

    hyperstyx

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    Search "home sale and taxes". It's one way to be sure.
     
  5. MIKES LAW

    MIKES LAW

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    You are thinking about the old rule where you had to reinvest or be taxed. If you and your spouse lived in your primary residence for two out of the last five years then you can exclude up to $500,000 in gain from income. Based just on what you wrote you would have no includable income on any of the gain. If there are any relevant facts that you didn't write about then YMMV. Otherwise, enjoy. :cool: