Posted on: 09th Mar, 2007 09:53 am
received the house in divorce in 2000, my ex has given the ownership and deed, now planning to sell the house, after that i will purchase a new house few months later, during this time i will stay with my parents. i am expecting to make some gain from sale of this house, can be $20,000 but not more than that. do i need to pay tax on this gain? for purchase when i apply mortgage will alimony income money considered for qualifying for mortgage also with my other type of income like my salary, what documents I will have to give for showing the alimony.
Hi Jennifer,
Welcome to Mortgagefit forum.
The profit you make from sale of this present house (at most $20,000) will not be taxable income as it will fall under exclusion limit for capital gain taxes.
There is a maximum profit limit of $250,000 which a person can make from sale of his house without having to pay any taxes. For this exclusion to be applicable the person is required to use the house as his primary residence for 2 years out of the last 5 years before the house is sold.
You received the house in 2000 and it's been 7 years now you have been living in the house and using it as your primary residence. So you won't have to pay any tax on the profit as it is within the capital gains tax exclusion amount and meets the requirement for such exclusion.
Colin
Welcome to Mortgagefit forum.
The profit you make from sale of this present house (at most $20,000) will not be taxable income as it will fall under exclusion limit for capital gain taxes.
There is a maximum profit limit of $250,000 which a person can make from sale of his house without having to pay any taxes. For this exclusion to be applicable the person is required to use the house as his primary residence for 2 years out of the last 5 years before the house is sold.
You received the house in 2000 and it's been 7 years now you have been living in the house and using it as your primary residence. So you won't have to pay any tax on the profit as it is within the capital gains tax exclusion amount and meets the requirement for such exclusion.
Colin
" for purchase when i apply mortgage will alimony income money considered for qualifying for mortgage also with my other type of income like my salary "
Yes the alimony income you receive can be considered in your qualification for mortgage. Lender would normally want you to provide a copy of your divorce decree, legal separation agreement or voluntary payment agreement which documents alimony to be received. You will also have to provide evidence that you had received payments in the last 12 months. You can show cancelled checks, deposit slips, tax returns or court records to prove that you did receive payments during the last 12 months.
Miller
Yes the alimony income you receive can be considered in your qualification for mortgage. Lender would normally want you to provide a copy of your divorce decree, legal separation agreement or voluntary payment agreement which documents alimony to be received. You will also have to provide evidence that you had received payments in the last 12 months. You can show cancelled checks, deposit slips, tax returns or court records to prove that you did receive payments during the last 12 months.
Miller