04-11-2013, 04:37 PM
The link is good but didn't really answer your question.
Your basis is the amount you paid plus the amount you can document as "capital improvements". That can be labor, materials, fees associated with remodeling, but does not include capital spent on maintenance such as painting or repairing the roof. It gets a little hazy when you try to figure out if upgrading a 50-year old furnace is an improvement or maintenance.
If you meet the use and time test, current law lets you exclude $250k tax-free ($500k if married filing jointly) of capital gain. One can make a lot of money if they can buy cheap, fix cheap, live there for 2 years and sell for a premium. Lather, rinse, repeat.
Your basis is the amount you paid plus the amount you can document as "capital improvements". That can be labor, materials, fees associated with remodeling, but does not include capital spent on maintenance such as painting or repairing the roof. It gets a little hazy when you try to figure out if upgrading a 50-year old furnace is an improvement or maintenance.
If you meet the use and time test, current law lets you exclude $250k tax-free ($500k if married filing jointly) of capital gain. One can make a lot of money if they can buy cheap, fix cheap, live there for 2 years and sell for a premium. Lather, rinse, repeat.