If you build your own house...

[nonameo]

And it is appraised at a higher value than it was built for, is that considered taxable income?

 

[vi edit]

Only if you sold it.

 

[Smolek]

Originally posted by: vi_edit
Only if you sold it.

Until then it is considered equity.

 

[Bryophyte]

Yep, only when you sell it. And even then, you're not necessarily going to be paying any taxes if it's your primary residence.

 

[vi edit]

Originally posted by: Bryophyte
Yep, only when you sell it. And even then, you're not necessarily going to be paying any taxes if it's your primary residence.

Well, you technically have to live there for two years or more and/or? sell it for less than $500k profit. Not quite sure on the specifics, but there is a bit of red tape when it comes to flipping primary homes.

 

[IntrinsicValue]

Actually if it's your primary residence, you don't claim it as taxable income. On the flip side, you cannot claim a loss if you sold it as a loss (again, this applies only if it's your primary residence).

 

[DrPizza]

Originally posted by: nonameo
And it is appraised at a higher value than it was built for, is that considered taxable income?

I don't see how it's possible to build your own home and not have it appraise for more than you paid for the materials - unless you're an incredibly shoddy craftsman.

 

[Rogodin2]

I don't see how it's possible to build your own home and not have it appraise for more than you paid for the materials - unless you're an incredibly shoddy craftsman.

As long as you build it under code you're fine-but most stick built homes even compliance to code are horrible.

Rogo

 

[compuwiz1]

Depending on how many of the different phases of the construction you can do yourself, you'll save a bundle. A general contractor gets his cut, but he usually uses sub contractors for foundations, framing, plumbing, electric, roofing, etc. All those subs have a wage to earn, and there might even be a mark-up on the materials.

Is the house worth less because you built it yourself? No, provided it is up to same quality standards that a contractor would build.

I have a friend who claims he built a spec house using his credit cards, then when complete sold it, at 300% if what it cost him to build. Turned out to be a sweet deal.