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Level 3

Mortgage Pay Off

January 2019, I sold my home in Maryland, and bought a new home in SC. My question; The sale of my Md. home equaled the cost of the new SC home, however, I had to use 65k of the sale for miscellaneous purchases. So, would it now make sense (before end 2019) to pay off the new loan by cashing out of some stocks? To be clearer about this:

 

Sold Md - 225k
Purchased SC - 225k/paid 160k from Md. sale (leaving 65k mortgage).
So, should I pay capital gains on the 65k, or is it better to pay off mortgage selling stock and then pay taxes on stock sale?

 

My 65k mortgage is 30yr fixed, but the total interest on the loan at maturity is the same as the original principal (65k and 65k).

 

Thanks all.

1 Reply
Level 20

Mortgage Pay Off

If your gain was more than  $250,000 filing Single, or more than $500,000 filing Married Filing Jointly the sale must be reported on your tax return.  Whether you re-invested the gain in to another house is irrelevant.    Investing in another house using the money from the sale of your house has been irrelevant since 1997.  What you do with the gain from the sale of your house is irrelevant.  If you  have a Form 1099-S go to Federal>Wages and Income>Less Common Income>Sale of Home (gain or loss)

If you owned and lived in the home as your primary residence for at least 2 of the last 5 years on the date of the sale, you do not have to report the home sale if the gain is less than $250K filing Single, or less than $500K filing Married Filing Jointly (and you both owned and lived in the home for at least 2 years).