selling a house for first time

[danyael]

Hello,
I was a first time home buyer last August (2018).  Long story short, I didn't like the home after I bought it.. too much wrong the home inspection didn't uncover. I never moved in.
My realtor will be listing my home for sale tomorrow (07/15/19), I did put a lot of money into it and will make quite a profit (not my original intention).
Is there a way to not pay taxes on a capital gain?
Here are my facts:
paid $52,000 for house.
Total closing costs (including down payment) $15,061.13 (home inspection fee, appraisal, etc..)

Currently I have around $28-30k invested with materials, contractors, etc.. but not including my hundreds of man hours that I obviously do not charge myself a fee for (or pay myself) (and if it came down to that, can I write off my own labor as expense?).

I am a contractor and make around $30k/yr on the books.
I am single and file taxes single.
I never moved into the house and am still living in my apartment (so paying rent and mortgage plus 2 sets of utilities)
I expect to make around $40k± 'profit' after everything is said and done and will use that right away toward either another house or buy some cheap land and buy a 'shelter kit' home... or a different pre-assembled home.

In addition to my previous question, what advice does anyone 'in the know' have for me? I appreciate anything you can offer!

Thanks

*also: since I am so close to a year of actual ownership and then the long term capital gains would apply and in my income bracket I believe I would pay %0 on the sale, at what point does that 'date' apply that I would have a 'sale' listed for income purposes? Date of closing? Date I get my money from the sale? I still owe on the mortgage so I would expect they would get their money first, then funnel me the leftovers; minus the commission, etc.
I could tell you all the layers of networking and the topology of a neighborhood electric grid or backbone (for internet) but this stuff seems to elude me... probably because I've never been through this before..?

[Anonymous]

if you close on sale one year after the closing date of the purchase, the gain will be fully taxable as long-term capital gain.  you are right it might all be taxed at 0% depending on your tax situation.  if you sell it before then, the gain will be short-term capital gain taxable at whatever tax bracket(s) you're in. to get any exclusion it would need to have been your primary residence (it wasn't, your apartment was) and you would have  needed to have lived in and owned it for two years out of five years before sale.   based on what info you've provided, it doesn't appear you would meet any of the conditions for a partial exclusion.   if you want an idea of where your taxes for 2019 TT has a free tax projection website - taxcaster.

[danyael]

Thanks.

After hours of research that seemed to be about the best thing I saw.  I closed on the 24th last August so I will wait about 1 more week before I have my listing go live in the MLS.  Should things get down to the nitty-gritty, I will just delay until the 25th of August because I will be "out of town on business".

I hate trying to skirt around paying those taxes, but I feel I get taken advantage of being a contractor and paying.  seems when I was working retail management and making around $40k/year I was paying less in taxes vs now; which is that my income has remained steady but my obligation keeps getting greater and greater.  $3,800 this year. :`(

I just want the max home buying potential as it is already hard enough getting a loan being self-employed with deductions... :(

[tagteam]

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@danyael wrote:

In addition to my previous question, what advice does anyone 'in the know' have for me? I appreciate anything you can offer!

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One thing: if you are actually going to be netting $40+k in one year, keep doing it - that's somewhere around a 50% profit in just one year.

Regardless, I felt compelled to inquire, in light of the first sentence, whether you took the improvements and selling expenses into consideration when you arrived at the ~$40k net profit. 

Hopefully, you are aware that you would add the $28-30k in improvements to your $52k cost basis and then subtract that figure from your sales price less selling expenses (primarily commission). So, if your selling price is somewhere in the neighborhood of $130k, then your stated profit figure is roughly accurate. 

[danyael]

Thanks tagteam,

Yes, I did take into consideration the amount of money I have pumped into the house and will deduct that (total amounts, down payment, closing costs, home inspection, etc..) along with all the closing costs (well, what the seller usually pays for) into consideration; in addition to the listing agent and service fees, which I believe is %6.

If I just broke even I would be satisfied as this has been a very long pain in the rear.  Definitely a very big eye opening experience and I certainly learned an incredible amount of new things that no book or class could have ever prepared me for!!!

I will slightly admit, seeing it come together and looking at the before and then after pictures is very gratifying... but then I think of the headaches, frustrations, anger, helplessness, and so forth of dealing with: CONTRACTORS!  >:o

I am a contractor myself but if I ran my business the way some of these guys do, I'd be out of business!!!  I don't know how they even put food on their tables!  Maybe they don't?  I don't know.

There have been about 45 different contractors I have contacted, most don't respond at all.  Most of the ones that do respond, ghost me after they realize I am not some gullible homeowner with deep pockets, the very few that actually show up either suck and I have to ask them to leave, tell them to never come back, or flat out argue their work is a joke and I am not paying for jokes because now I have to get someone else to do the initial job PLUS fix their slop.... and about 3 of those 45 ± were actually good or decent.

MAYBE, if I had a nice, skillful, RELIABLE, team, it would be different... but I have zero luck.

Anyway, sorry to make so long... thanks for the reply!