Tax consequences of selling a homebuilt.

Ron Natalie wrote:
In the US you owe capital gains on your residence, but there is an
exclusion of $250,000 if it is your principle residence for 2 out of
the last 5 years.

There's no such exclusion for most anything else/

IIRC the exclusion for your principle residence is
$250K per person, so if you are married filing
jointly you can take a $500K capital gains
exclusion on the sale of your principle residence.

Don W.

Don W wrote:

Ron Natalie wrote:
In the US you owe capital gains on your residence, but there is an
exclusion of $250,000 if it is your principle residence for 2 out of
the last 5 years.

There's no such exclusion for most anything else/

IIRC the exclusion for your principle residence is $250K per person, so
if you are married filing jointly you can take a $500K capital gains
exclusion on the sale of your principle residence.

Don W.

Yes, each owner can exclude up to $250,000 if he meets the 24in60
principle residence test. The only thing marriage does is allow you to
take the deduction without strictly being on the deed.

Ron Natalie wrote:
Don W wrote:

Ron Natalie wrote:
In the US you owe capital gains on your residence, but there is an
exclusion of $250,000 if it is your principle residence for 2 out of
the last 5 years.

There's no such exclusion for most anything else/

IIRC the exclusion for your principle residence is $250K per person,
so if you are married filing jointly you can take a $500K capital
gains exclusion on the sale of your principle residence.

Don W.

Yes, each owner can exclude up to $250,000 if he meets the 24in60
principle residence test. The only thing marriage does is allow you to
take the deduction without strictly being on the deed.

My wife being a real-estate agent, I can confidently attest that it is a
lot more complicated than that. But this is the US tax code we speak
of, so you already knew that didn't you? There is a whole list of
exclusions, inclusions and dependancies based on when you bought the
house, and which way the wind is blowing when you get audited. You can
also have a vacation home fall under these rules.

So bringing it back to the tax ramifications on a homebuilt. As we all
know, a homebuilt project is never done. If you're paying the capital
gains on the appreciation between when it was finished and when it was
sold, then I just completed it or a restoration (define restoration) the
week before I sold it.

Ernest Christley wrote:
....
So bringing it back to the tax ramifications on a homebuilt. As we all
know, a homebuilt project is never done. If you're paying the capital
gains on the appreciation between when it was finished and when it was
sold, then I just completed it or a restoration (define restoration) the
week before I sold it.

Nice try, but the U.S. tax Code figures any gain as the
difference between hard costs (basis) since day one and net sales
price.

Fred F.

In article , TxSrv wrote:
Ernest Christley wrote:
....
So bringing it back to the tax ramifications on a homebuilt. As we all
know, a homebuilt project is never done. If you're paying the capital
gains on the appreciation between when it was finished and when it was
sold, then I just completed it or a restoration (define restoration) the
week before I sold it.

Nice try, but the U.S. tax Code figures any gain as the
difference between hard costs (basis) since day one and net sales
price.

Fred F.


Can you deduct your mileage while driving to & from the airport to build? Or
driving around buying parts & materials?

How about hangar rent while building?

On Thu, 07 Sep 2006 00:22:27 GMT, (who cares?)
wrote:

In article , TxSrv wrote:
Ernest Christley wrote:
....
So bringing it back to the tax ramifications on a homebuilt. As we all
know, a homebuilt project is never done. If you're paying the capital
gains on the appreciation between when it was finished and when it was
sold, then I just completed it or a restoration (define restoration) the
week before I sold it.

Nice try, but the U.S. tax Code figures any gain as the
difference between hard costs (basis) since day one and net sales
price.

Fred F.


Can you deduct your mileage while driving to & from the airport to build? Or
driving around buying parts & materials?

How about hangar rent while building?

sure those sound like hard costs to me. I think all the gas you burn
while "test flying" your creation should count too.

who cares? wrote:

Can you deduct your mileage while driving to & from the airport to build? Or
driving around buying parts & materials?

How about hangar rent while building?

I really don't think so, but not solely because of tax law. If
building an airplane with the intent of selling at a profit, then
you're afoul of FAA's amateur-built rules. Can't have it both
ways. Under tax law, there's further problems in adding such
costs to basis of aircraft sold, as to what tax Code section you
may legally do that. Unless you really are in the ongoing,
regular business of selling planes you build for profit, and then
you are clearly afoul of the amateur-built rules.

Fred F.

"TxSrv" wrote in message
. ..
I really don't think so, but not solely because of tax law.

Don't tell, don't smell.

Rich S.

Drew Dalgleish wrote:
Can you deduct your mileage while driving to & from the airport to build? Or
driving around buying parts & materials?

How about hangar rent while building?

sure those sound like hard costs to me. I think all the gas you burn
while "test flying" your creation should count too.

Nope there too. Tax statutes are actually precisely structured to
prevent the deduction of logical nonsense. Unless you're in the
trade or business of building airplanes for profit. To preserve
deduction (under either section 162 or 263A of the tax Code), be
sure to tell your FAA or DAR inspector guy of what you're
really doing. :-)

Fred F.

Ernest Christley wrote:

My wife being a real-estate agent, I can confidently attest that it is a
lot more complicated than that. But this is the US tax code we speak
of, so you already knew that didn't you? There is a whole list of
exclusions, inclusions and dependancies based on when you bought the
house, and which way the wind is blowing when you get audited. You can
also have a vacation home fall under these rules.

It's complicated, but when you bought the house has NO bearing on it
(other than obviously that you must have bought it at least two years
earlier unless you get one of the special exceptions for "involuntary"
sale). The only other obvious mess is if you rolled the profit from the
sale of a house previously (under the old rules) into the current house.
All that does is change your basis. It doesn't change the capital
gains exclusion. The only other vagaries are how do you establish
that you were actually using the property for the primary residence
(especially if you have more than one property you are living in).


So bringing it back to the tax ramifications on a homebuilt. As we all
know, a homebuilt project is never done. If you're paying the capital
gains on the appreciation between when it was finished and when it was
sold, then I just completed it or a restoration (define restoration) the
week before I sold it.

It has nothing to do when it was finished. Your basis is your cost
outlay on it.