Tax Guy: Dear Tax Guy: ‘What happens if I sell my existing house to pay off the loan on my new home? How much tax will I owe?’

by | Nov 16, 2022 | Stock Market

Greeting, readers. I’m Andrew Keshner and I’m the tax reporter for MarketWatch. I write about the controversies, open questions and best strategies about taxes. For the purposes of this new column, that also makes me the ‘Tax Guy.’ I’m not an accountant. I’m a journalist who will endeavor to help you find answers to your questions, and try to explain on this site what I have learned. That sounds simple, but it can be tricky in practice. And that’s why I’m here. When I mention this at parties, one of two things happen: discussing “taxes” either induces glazed-over resignation or it sparks fiery curiosity about the ways a person’s extremely specific set of circumstances jibe with IRS rules. It doesn’t have to be that way. And without further ado…Dear Tax Guy,

I understand that any profit from a real-estate sale is not taxable if it is used to purchase another house within three years. My question is what happens if I buy another house and then sell my existing house to pay off the loan on my new home? Does the order of purchase and sale matter? Mulling the Market Dear Mulling the Market, I’m going to let you down gently. You say real-estate profits get a tax break if they are used to purchase a home within three years, but ac …

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