Building a custom house on land - Early planning phase - What do I need to know about capital gains? (1 Viewer)

[DA RAIDERS]

so my house should sell for anywhere between 550 and 600,000, I owe 300,000.

What you’re saying above means - if I dont reinvest my money into another property within 45 days I should only have to pay capital gains on any profit over $250,000?

correct.  if married and filling jointly, it's 500K

 

[johnnycakes]

so my house should sell for anywhere between 550 and 600,000, I owe 300,000.

What you’re saying above means - if I dont reinvest my money into another property within 45 days I should only have to pay capital gains on any profit over $250,000?

Is this your primary residence you're selling?

 

[STEADYMOBBIN 22]

Is this your primary residence you're selling?

Yes sir. 
 

-ETA , We wanted to wait until the kids are done with school but with the home prices skyrocketing again it may happen sooner. 

 

[johnnycakes]

Yes sir. 
 

-ETA , We wanted to wait until the kids are done with school but with the home prices skyrocketing again it may happen sooner. 

oK, if you're selling your primary residence, forget about the 1031 exchange.  If you have lived in that house for two out of the last five years and you're married filing jointly, you can exclude up to $500,000 of gain on sale.  

 

[The Z Machine]

Yes sir. 
 

-ETA , We wanted to wait until the kids are done with school but with the home prices skyrocketing again it may happen sooner. 

What are you going to do for lodging after you sell?

 

[STEADYMOBBIN 22]

What are you going to do for lodging after you sell?

If we sell- we would rent closer to the school for a couple of years until the girls are done. We also have a ginormous dog that’s a consideration/ issue for renting. 

It’s a very fluid situation. We’re just weighing all of our options. 
 

We don’t want to buy anything right now because of the home/land prices and we dont want to move the girls to a different HS. 
 

If the home prices keep going up we just might have to speed up the process. Our house has gained 100k in equity just in the past 12 months. 

 

[Zegras11]

If we sell our house, how long before we have to buy again to avoid capital gains, IIRC, it’s two years. Is that the case?

Do I have any other options? Can I invest it short term? Can I buy land and build later? 

We have 3 years left of HS so if we sold the plan would be:

Sell the house, rent for a few years and then buy the land/legacy house we’ve been saving/planning to do. 
 

Thanks in advance. 

Have to live in it two of the last 5 years.

for a 1031 exchange you need to identify the new property in 45 days.  close escrow in 180 days

can't 1031 a primary residence.

Could rent it out next two years and then it could 1031.

 

[DA RAIDERS]

Jcakes and getzlaf are correct. 1031 is no good on personal residence.  500k exemption, if it is. 

 

[Beef Ravioli Part 2]

@STEADYMOBBIN 22
Any updates?

 

[STEADYMOBBIN 22]

@STEADYMOBBIN 22
Any updates?

TL/DR: Just isnt practical. Land and material prices skyrocketed and Im not getting any younger.

Longer version:

We talked ourselves out of this idea over the course of several trips to WV and PA but it was one conversation with a buddy of mine who really ended it for me. After I told him my idea of having this beautiful home up in the mountains away from all of civilization with horses and livestock he says, "Yeah, but then you'll be old. You wont want to have to do all that stuff".

I know it sounds obvious but it kinda blew my mind. It dawned on me that Im not a young man anymore. (45) I dont want any of that responsibility and having a mansion in the mountains wont be anything but problems for my kids to deal with later.

Additionally, Houses are meant to be lived in. Leaving the house empty for months is a bad idea. Security is another. I'd stay there by myself, but my wife and girls would never. Access to medical care in our older years would also be a concern.

 

[Beef Ravioli Part 2]

@STEADYMOBBIN 22
Any updates?

TL/DR: Just isnt practical. Land and material prices skyrocketed and Im not getting any younger.

Longer version:

We talked ourselves out of this idea over the course of several trips to WV and PA but it was one conversation with a buddy of mine who really ended it for me. After I told him my idea of having this beautiful home up in the mountains away from all of civilization with horses and livestock he says, "Yeah, but then you'll be old. You wont want to have to do all that stuff".

I know it sounds obvious but it kinda blew my mind. It dawned on me that Im not a young man anymore. (45) I dont want any of that responsibility and having a mansion in the mountains wont be anything but problems for my kids to deal with later.

Additionally, Houses are meant to be lived in. Leaving the house empty for months is a bad idea. Security is another. I'd stay there by myself, but my wife and girls would never. Access to medical care in our older years would also be a concern.

The reason I asked…my wife and I have similar dreams, on a much smaller scale. I missed this thread when you first posted but saw it listed as a “similar” thread in another post recently. Read through it and gained some good ideas. I agree with you, your big house dreams were far bigger than what we are thinking or could handle.

I live in the same region as you (25 miles south of DC in Virginia). Wife, me and my two adult sons have fallen in love with southern Virginia or even sneaking into eastern WV. South of Harrisonburg, north of Roanoke region.

The dream is to cash in on our overpriced Northern Virginia home in 10-15 years from now and turn that into a 2500 sq foot house on 5-10 acres in the dream region. We only want that much acreage to keep some distance from our neighbors. Want much of the property to be woods with just a small portion cleared for the house. A big creek or small river is high on our priority list.

We are casually watching for properties for sale now and may move on something if the right one became available.

I’m 52 now and plan to work till I’m 65 but I’ve been told these next 15 years are going to be much quicker than the last 15 years were.

Thanks for the thread and the ideas!

 

[Uruk-Hai]

@STEADYMOBBIN 22
Any updates?

TL/DR: Just isnt practical. Land and material prices skyrocketed and Im not getting any younger.

Longer version:

We talked ourselves out of this idea over the course of several trips to WV and PA but it was one conversation with a buddy of mine who really ended it for me. After I told him my idea of having this beautiful home up in the mountains away from all of civilization with horses and livestock he says, "Yeah, but then you'll be old. You wont want to have to do all that stuff".

I know it sounds obvious but it kinda blew my mind. It dawned on me that Im not a young man anymore. (45) I dont want any of that responsibility and having a mansion in the mountains wont be anything but problems for my kids to deal with later.

Additionally, Houses are meant to be lived in. Leaving the house empty for months is a bad idea. Security is another. I'd stay there by myself, but my wife and girls would never. Access to medical care in our older years would also be a concern.

The reason I asked…my wife and I have similar dreams, on a much smaller scale. I missed this thread when you first posted but saw it listed as a “similar” thread in another post recently. Read through it and gained some good ideas. I agree with you, your big house dreams were far bigger than what we are thinking or could handle.

I live in the same region as you (25 miles south of DC in Virginia). Wife, me and my two adult sons have fallen in love with southern Virginia or even sneaking into eastern WV. South of Harrisonburg, north of Roanoke region.

The dream is to cash in on our overpriced Northern Virginia home in 10-15 years from now and turn that into a 2500 sq foot house on 5-10 acres in the dream region. We only want that much acreage to keep some distance from our neighbors. Want much of the property to be woods with just a small portion cleared for the house. A big creek or small river is high on our priority list.

We are casually watching for properties for sale now and may move on something if the right one became available.

I’m 52 now and plan to work till I’m 65 but I’ve been told these next 15 years are going to be much quicker than the last 15 years were.

Thanks for the thread and the ideas!

I live a little north of Harrisonburg, but am down in your target zone quite often. It's beautiful there.

 

[Beef Ravioli Part 2]

@STEADYMOBBIN 22
Any updates?

TL/DR: Just isnt practical. Land and material prices skyrocketed and Im not getting any younger.

Longer version:

We talked ourselves out of this idea over the course of several trips to WV and PA but it was one conversation with a buddy of mine who really ended it for me. After I told him my idea of having this beautiful home up in the mountains away from all of civilization with horses and livestock he says, "Yeah, but then you'll be old. You wont want to have to do all that stuff".

I know it sounds obvious but it kinda blew my mind. It dawned on me that Im not a young man anymore. (45) I dont want any of that responsibility and having a mansion in the mountains wont be anything but problems for my kids to deal with later.

Additionally, Houses are meant to be lived in. Leaving the house empty for months is a bad idea. Security is another. I'd stay there by myself, but my wife and girls would never. Access to medical care in our older years would also be a concern.

The reason I asked…my wife and I have similar dreams, on a much smaller scale. I missed this thread when you first posted but saw it listed as a “similar” thread in another post recently. Read through it and gained some good ideas. I agree with you, your big house dreams were far bigger than what we are thinking or could handle.

I live in the same region as you (25 miles south of DC in Virginia). Wife, me and my two adult sons have fallen in love with southern Virginia or even sneaking into eastern WV. South of Harrisonburg, north of Roanoke region.

The dream is to cash in on our overpriced Northern Virginia home in 10-15 years from now and turn that into a 2500 sq foot house on 5-10 acres in the dream region. We only want that much acreage to keep some distance from our neighbors. Want much of the property to be woods with just a small portion cleared for the house. A big creek or small river is high on our priority list.

We are casually watching for properties for sale now and may move on something if the right one became available.

I’m 52 now and plan to work till I’m 65 but I’ve been told these next 15 years are going to be much quicker than the last 15 years were.

Thanks for the thread and the ideas!

I live a little north of Harrisonburg, but am down in your target zone quite often. It's beautiful there.

We stayed on Craigs Creek outside of Eagle Rock a few years ago and fell in love. My wife loves Roanoke also. We were just in Harrisonburg a few weeks ago. Awesome town!

 

[Sand]

Additionally, Houses are meant to be lived in. Leaving the house empty for months is a bad idea.

Buy utility, rent luxury. This is a wise choice.