When Selling A Home, Do You Have To Reinvest The Money You Make From The Home Into Another Property?
I wіƖƖ bе selling mу home, аnԁ іt іѕ mу understanding thаt уου wіƖƖ pay extra taxes іf уου ԁο nοt invest thе money уου mаkе frοm selling thе home within a year уου hаνе tο pay extra taxes οn thаt money.
If you sold your main home, you may be able to exclude up to $250,000 of gain ($500,000 for married taxpayers filing jointly) from your federal tax return. This exclusion is allowed each time that you sell your main home, but generally no more frequently than once every two years.
To qualify for this exclusion of gain, you must meet ownership and use tests.
*Ownership Test: During the 5-year period ending on the date of the sale, you must have owned the home for at least 2 years.
*Use Test: During the 5-year period ending on the date of the sale, you must have lived in the home as your main home at least 2 years.
In Illinois, if your profit is $50,000.00 or more you must invest into another property or it will be counted as income and you’ll have to pay taxes on it.
I think if you live on that house for five years you pay no taxes