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Old 12-06-2017, 07:02 AM   #1
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Default Senate Tax Bill changes residence requirement

Just noticed this: The Senate's tax bill, which passed in hand-written scribbles in the middle of the night a few nights back, changes the requirement for a personal residence to avoid a capital gains penalty from two years owner-occupation to FIVE.

Any idea what this will do to the ability for people to buy and sell homes?

My wife and I live in a nice little two bedroom place. It's small, and the bedrooms are on different floors, but hey, as long as we don't have a kid running around, we'll be alright.

Whoops. She's 12 weeks pregnant. How exciting! Now we need to sell our place and move. Except we can't (if this passes through committee) without taking a MASSIVE penalty on the back end, because we haven't lived here for five years.

That makes it harder for us to buy our next house. It means we have less money with which to buy our next house. And that means less tax revenue on the sale of a larger house.

While price is celebrating poor people losing healthcare, this bill also has very real implications for middle class families like ours.

This tax bill hurts the middle class. Call your Congressional representatives and tell them to AT LEAST remove this stupid provision from the bill.
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Old 12-06-2017, 07:20 AM   #2
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Originally Posted by TheElusiveKyleOrton View Post
Just noticed this: The Senate's tax bill, which passed in hand-written scribbles in the middle of the night a few nights back, changes the requirement for a personal residence to avoid a capital gains penalty from two years owner-occupation to FIVE.

Any idea what this will do to the ability for people to buy and sell homes?

My wife and I live in a nice little two bedroom place. It's small, and the bedrooms are on different floors, but hey, as long as we don't have a kid running around, we'll be alright.

Whoops. She's 12 weeks pregnant. How exciting! Now we need to sell our place and move. Except we can't (if this passes through committee) without taking a MASSIVE penalty on the back end, because we haven't lived here for five years.

That makes it harder for us to buy our next house. It means we have less money with which to buy our next house. And that means less tax revenue on the sale of a larger house.

While price is celebrating poor people losing healthcare, this bill also has very real implications for middle class families like ours.

This tax bill hurts the middle class. Call your Congressional representatives and tell them to AT LEAST remove this stupid provision from the bill.
Iím not an expert on this but isnt that waived if you are purchasing another primary residence?
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Old 12-06-2017, 07:29 AM   #3
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Iím not an expert on this but isnt that waived if you are purchasing another primary residence?
Nope.

Pretty ****ed up, eh?
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Old 12-06-2017, 07:39 AM   #4
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So much winning and swamp draining by the populist hero in the WH it makes your head spin...
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Old 12-06-2017, 08:54 AM   #5
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Nope.

Pretty ****ed up, eh?
You are talking about the tax (usually between 0% and 15% max) on the capital gains of the sale of the house. If you have lived in a small 2 bedroom house for less than 5 years you will probably pay no tax.

Please tell me how you are coming up with a ďmassive penalty ď on the back end of the sale of a small 2 bedroom house? Call your CPA and I bet he or she will assure you this item in the proposed tax bill will not be a massive problem for you and your wife.

Congratulations on the expectation of a new baby, nothing better than that.
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Old 12-06-2017, 09:24 AM   #6
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I would think this is on rental property. I think you can sell your home and as long as you put that gain back in to the next house, you don't pay tax- I think you people are exempt up to the first 250K in cap gains

maybe this changes all that... have to see specifics
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Old 12-06-2017, 09:29 AM   #7
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I would think this is on rental property. I think you can sell your home and as long as you put that gain back in to the next house, you don't pay tax- I think you people are exempt up to the first 250K in cap gains

maybe this changes all that... have to see specifics
Surprisingly, it's not just for rental properties.

If you buy a home with the intent to rent it, and never live in it, you have to own it for five years before selling if you want to avoid the cap gains. This changes that to include owner-occupied dwellings for five years.

It's pretty ridiculous. Changing something that didn't need changing.

But I guess that's what you get when you rush a hand-written bill through at 2am.

As for the range, I think it's actually 15-30% for cap gains penalty. Losing a quarter of the earned value stings. A lot.
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Old 12-06-2017, 09:43 AM   #8
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I would think this is on rental property. I think you can sell your home and as long as you put that gain back in to the next house, you don't pay tax- I think you people are exempt up to the first 250K in cap gains

maybe this changes all that... have to see specifics
Looks like it's 500k for joint filers.

So to see any tax in this scenario, you'd have to have made a $half-million capital gain on a property in a very short time.

And I was told tax breaks for millionaires was like a bad deal or something.
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Old 12-06-2017, 10:20 AM   #9
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As for the range, I think it's actually 15-30% for cap gains penalty. Losing a quarter of the earned value stings. A lot.
Where are you getting 15 to 30%? Itís 0 to 15% with a max of 20% if you are in the top tax bracket. Most middle class families pay nothing on the sale of their home.

Do you have a CPA or tax attorney you can call, you are way off base, this change has nothing to do with you, itís going after the larger investors that play the two year loophole on real estate investments.
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Old 12-06-2017, 10:24 AM   #10
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Looks like it's 500k for joint filers.

So to see any tax in this scenario, you'd have to have made a $half-million capital gain on a property in a very short time.

And I was told tax breaks for millionaires was like a bad deal or something.
Topic Number: 701 - Sale of Your Home

If you have a capital gain from the sale of your main home, you may qualify to exclude up to $250,000 of that gain from your income. You may qualify to exclude up to $500,000 of that gain if you file a joint return with your spouse. Publication 523, Selling Your Home, provides rules and worksheets.

https://www.irs.gov/taxtopics/tc701
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Old 12-06-2017, 10:27 AM   #11
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Looks like it's 500k for joint filers.

So to see any tax in this scenario, you'd have to have made a $half-million capital gain on a property in a very short time.

And I was told tax breaks for millionaires was like a bad deal or something.
He's an idiot.
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Old 12-06-2017, 10:28 AM   #12
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Topic Number: 701 - Sale of Your Home

If you have a capital gain from the sale of your main home, you may qualify to exclude up to $250,000 of that gain from your income. You may qualify to exclude up to $500,000 of that gain if you file a joint return with your spouse. Publication 523, Selling Your Home, provides rules and worksheets.

https://www.irs.gov/taxtopics/tc701
more triggering from people who don't understand the tax law. Hell I don't understand a lot of it either that is why I don't get triggered. I just ask my tax guy.
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Old 12-06-2017, 01:35 PM   #13
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He's an idiot.
Trump? Sure is.

So are the dip****s who voted for him. Like you.
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Old 12-06-2017, 03:29 PM   #14
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Trump? Sure is.

So are the dip****s who voted for him. Like you.

Triggered yet again anything else you wanna jump into today?
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Old 12-06-2017, 03:34 PM   #15
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Surprisingly, it's not just for rental properties.

If you buy a home with the intent to rent it, and never live in it, you have to own it for five years before selling if you want to avoid the cap gains. This changes that to include owner-occupied dwellings for five years.

It's pretty ridiculous. Changing something that didn't need changing.

But I guess that's what you get when you rush a hand-written bill through at 2am.

As for the range, I think it's actually 15-30% for cap gains penalty. Losing a quarter of the earned value stings. A lot.

the question to ask, what behavior are they trying to encourage? Keep property, stabilize neighborhoods, less speculation on real estate.
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Old 12-06-2017, 03:47 PM   #16
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The tax cut is going to be awesome! We just have to pass it to see what's in it!
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Old 12-06-2017, 03:51 PM   #17
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Just noticed this: The Senate's tax bill, which passed in hand-written scribbles in the middle of the night a few nights back, changes the requirement for a personal residence to avoid a capital gains penalty from two years owner-occupation to FIVE.

Any idea what this will do to the ability for people to buy and sell homes?

My wife and I live in a nice little two bedroom place. It's small, and the bedrooms are on different floors, but hey, as long as we don't have a kid running around, we'll be alright.

Whoops. She's 12 weeks pregnant. How exciting! Now we need to sell our place and move. Except we can't (if this passes through committee) without taking a MASSIVE penalty on the back end, because we haven't lived here for five years.

That makes it harder for us to buy our next house. It means we have less money with which to buy our next house. And that means less tax revenue on the sale of a larger house.

While price is celebrating poor people losing healthcare, this bill also has very real implications for middle class families like ours.

This tax bill hurts the middle class. Call your Congressional representatives and tell them to AT LEAST remove this stupid provision from the bill.
When does this tax bill take effect officially?
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Old 12-06-2017, 03:53 PM   #18
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When does this tax bill take effect officially?
It'll have to be passed through a committee with the House, where they'll rectify the differences between the two chambers' bills.

Then it'll go to Trump's desk for a signature.
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Old 12-06-2017, 03:54 PM   #19
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the question to ask, what behavior are they trying to encourage? Keep property, stabilize neighborhoods, less speculation on real estate.
I'm not sure they know.

https://slate.com/business/2017/12/s...-tax-bill.html
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Old 12-06-2017, 04:30 PM   #20
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I'm sure they don't...
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Old 12-07-2017, 01:52 PM   #21
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http://www.denverpost.com/2017/12/07...-tax-overhaul/

"Capital gains tax rates vary based on income, but in the middle brackets they run 15 percent. That would translate into $16,500 in additional taxes in Denver and $22,500 in Boulder on a typical sale."

Think about what that $16k means when it comes to financing the purchase of a new house. That is not insignificant.

Call. Your. Congresscritters.
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Old 12-07-2017, 02:06 PM   #22
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"That would translate into the typical homeowner in Colorado losing home equity in the $24,000 to $36,000 range, Thayer said."

GREAT STUFF GUYS!
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Old 12-07-2017, 06:02 PM   #23
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"That would translate into the typical homeowner in Colorado losing home equity in the $24,000 to $36,000 range, Thayer said."

GREAT STUFF GUYS!
So youíre saying you own a small 2 bedroom home in the Denver Boulder area thatís worth between 392 and 516 thousand dollars. The tax on the capital gain will be a massive hit if you sell the home after the tax bill is passed? Wow the equity in your small 2 bedroom home must be huge.

I would be inclined to keep that home as a rental for the extra 3 years and that should cover the massive hit and will put more equity in your pocket.
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Old 12-07-2017, 09:18 PM   #24
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So youíre saying you own a small 2 bedroom home in the Denver Boulder area thatís worth between 392 and 516 thousand dollars. The tax on the capital gain will be a massive hit if you sell the home after the tax bill is passed? Wow the equity in your small 2 bedroom home must be huge.

I would be inclined to keep that home as a rental for the extra 3 years and that should cover the massive hit and will put more equity in your pocket.
We'd be inclined to do that too... except, oh yeah, the real estate market in Denver is the most expensive for a non-coastal city. We need the equity -- all the equity -- we have built to buy our next home. I thought you Republicans were all about planning and building for the future? Yet here we are, doing exactly that, following the rules, and the GOP decides to make it five years instead of two.

It's bogus. A way to rob the middle class to pay for the tax breaks they're giving to the richest Americans. And here you are... trying to find excuses for it.

What's your deal man? Why do you care so little about the middle class, which actually drives the economy? Why do you care so much about the richest of the rich, who are getting the benefit from a move like this?

We bought just under $400k. Estimates from our realtor and others have us in the $450k range. That's cap gains tax on $50k of equity that would be taxed (where prior, after two years, it would have avoided that cap gains tax hit).

And that's before we even start talking about what it does to inventory. If more people are holding on to their homes for longer, does inventory go up? Or does it go down?

If inventory goes down, is it easier, or harder to buy a home?

Right.

It's okay Pony. You just keep telling yourself how great this tax bill is for 'Merica. The rest of us will keep living in the real world.
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Old 12-07-2017, 10:25 PM   #25
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We'd be inclined to do that too... except, oh yeah, the real estate market in Denver is the most expensive for a non-coastal city. We need the equity -- all the equity -- we have built to buy our next home. I thought you Republicans were all about planning and building for the future? Yet here we are, doing exactly that, following the rules, and the GOP decides to make it five years instead of two.

It's bogus. A way to rob the middle class to pay for the tax breaks they're giving to the richest Americans. And here you are... trying to find excuses for it.

What's your deal man? Why do you care so little about the middle class, which actually drives the economy? Why do you care so much about the richest of the rich, who are getting the benefit from a move like this?

We bought just under $400k. Estimates from our realtor and others have us in the $450k range. That's cap gains tax on $50k of equity that would be taxed (where prior, after two years, it would have avoided that cap gains tax hit).

And that's before we even start talking about what it does to inventory. If more people are holding on to their homes for longer, does inventory go up? Or does it go down?

If inventory goes down, is it easier, or harder to buy a home?

Right.

It's okay Pony. You just keep telling yourself how great this tax bill is for 'Merica. The rest of us will keep living in the real world.
After you pay the realtor and closing you are going to be out at least another 20k. I donít know you situation but selling seems like a bad idea.
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