Can anyone recommend a good tax forum/site? Question for accountants/tax people.

[Arkitech]

I'm trying to avoid having to pay an accountant, can anyone out there direct me to a good place on the net for tax information?

 

[mcveigh]

Originally posted by: Arkitech
I'm trying to avoid having to pay an accountant, can anyone out there direct me to a good place on the net for tax information?

this can be a bad idea, especially if it's business related. doing personal taxes and accounting is one thing but trying to figure out busness accounting is soemthing else. I learned the hardway and am still trying to straigten out things with the IRS from my first business. Now I have a good accountant and he's worth his weight in gold. it's money well spent.

that said....
try here this is part of a site I'm helping design for my accountant. this site is actually a service from another company. but there are some links to good info if you look around.

 

[CPA]

<-- might be able to help, but it's gonna cost ya😀

 

[Arkitech]

Actually my questions are very simple but I just don't know where to go to look up the information on my own.

Here's the scenario

I bought some vacant land about 2 years ago using the equity in my home. I am now in the process of putting the land up for sale as the value of it is now 3 times more than what I paid for it. I also will be putting my home up for sale even though I have a second mortgage on it. Fortunately the value of my home doubled so I'll have enough money to pay off the second mortgage.


My questions are:

When I sell my home will I have to pay taxes on the money I use to pay off my second mortgage?

What part of the money from the sale of house is counted as income?

For example if I paid 150k for my house and I sold it for 300k would the 150k be counted as taxable money?

or

If my house is 150K, my 2nd mortgage is 50K and I sold the house for 300k would only 100k be counted as taxable money?


thanks for any input

 

[mcveigh]

I don't know the answer but I do know it varies state to state, a realator might have some answers also,

 

[Arkitech]

up

 

[Ly2n]

I would call the IRS and see if they have the information that you need. It would be covered under long term capital gains and selling your home. I believe that the gain is figured by subtracting your basis (what you paid for the house + any improvements) from the selling price. It doesn't matter how many mortgages you have. The gain on the vacent land is figured the same (less depreciation allowed). If you used the second mortgage to buy the land, the second mortgage is taken care of when you sell the land. The sale of your home has some special rules that allow you to pospone the capital gains or eliminate them. Lynn

 

[CPA]

Originally posted by: Arkitech
Actually my questions are very simple but I just don't know where to go to look up the information on my own.

Here's the scenario

I bought some vacant land about 2 years ago using the equity in my home. I am now in the process of putting the land up for sale as the value of it is now 3 times more than what I paid for it. I also will be putting my home up for sale even though I have a second mortgage on it. Fortunately the value of my home doubled so I'll have enough money to pay off the second mortgage.


My questions are:

When I sell my home will I have to pay taxes on the money I use to pay off my second mortgage?

What part of the money from the sale of house is counted as income?

For example if I paid 150k for my house and I sold it for 300k would the 150k be counted as taxable money?

or

If my house is 150K, my 2nd mortgage is 50K and I sold the house for 300k would only 100k be counted as taxable money?


thanks for any input

Taxable gain of sale of house = Proceeds from sale - 250,000 exemption (500k if married and also must meet ownership and living quarter requirements) - cost basis of property. Cost basis = cost plus costs of all additions and upgrades to the property (maintenance is not included.) In your case you would not have a taxable gain, but you must still file form D on a 1040.


Taxable gain on sale of land = Proceeds from sale - 250,000 exemption - cost basis of property. In this case, you have not met the living requirements, presumably, of the property, so you will NOT be allowed to take the exemption and you will need to pay taxes on the gain. Pull out any receipts that you have related to improvements to the land and add them to your cost. This will help reduce your gain and subsequently your taxes.


So good news and bad: Not tax consequence on the house sale, but tax consequence on the land sale.