If we sold our house in 2018 that we didn't have a mortgage on and then we started building our new house with the money from the sell of our house. How do we file that?
Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
graceland_23
New Member

If we sold our house in 2018 that we didn't have a mortgage on and then we started building our new house with the money from the sell of our house. How do we file that?

 
1 Reply
Coleen3
Intuit Alumni

If we sold our house in 2018 that we didn't have a mortgage on and then we started building our new house with the money from the sell of our house. How do we file that?

Having a mortgage and building a new home is irrelevant to the sale. If you qualify for a full exclusion and did not receive a 1099-S, you don't have to report it.

New Home

If you are building a house where you bought land and got a construction loan, you can deduct the interest you paid on the construction loan and your property taxes.

Obviously, you can't live in a home while it's being built. Fortunately, the tax law gives you a break here. So long as the home becomes your main home or second home on the day it's ready for occupancy, you can deduct all the interest you paid on the construction loan within 24 months before the home was complete.

If you are building a home with a builder that does not charge you for the home until you close (an "end" loan), then you cannot deduct anything (down payment, etc) until you occupy the home.

If you meet the qualifications to use the exclusion, any gain over that amount is a capital gain. The exclusions are $250,000 for single, and $500,000 for married filing jointly. See the rules below.

Does Your Home Sale Qualify for Maximum Exclusion

The tax code recognizes the importance of home ownership by providing certain tax breaks when you sell your home. To qualify for these breaks, your home must meet the Eligibility Test , which is explained later.

How your sale qualifies.   Your sale qualifies for exclusion of $250,000 gain ($500,000 if married filing jointly) if all of the following requirements are met.

  • You owned the home and used it as your main home during at least 2 of the last 5 years before the date of sale.
  • You didn’t acquire the home through a like-kind exchange (also known as a 1031 exchange), during the past 5 years.
  • You didn’t claim any exclusion for the sale of a home that occurred during a 2-year period ending on the date of the sale of the home, the gain from which you now want to exclude.
Dynamic AdsDynamic Ads
v
Privacy Settings