Question by SubConCents: Taxes on home sold with existing non-secured loan question?
If I purchased a home for example $ 200,000 with a non-secured loan (strictly based on paperwork and credit, but no lien on the house) and I sold the house for $ 200,000, would I have to pay taxes on that money since there were no capital gains?
Best answer:
Answer by Ann F
I cannot imagine anyone giving you $ 200 K on an unsecured loan.
If you know someone, tell the rest of us so we can get free money.
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Usually, you would not owe any tax as there was no gain on the sale.
However, that isn’t always true. It depends on the time frame and what you used the house for between the purchase and the sale.The fact a loan wasn’t secured by the property has very little to do with taxation (nothing at all in this situation).
Foe example. you purchased the house and rented it. You might have to recapture depreciation even if you did not take any. The law states depreciation taken or allowable. Simply put…just because you purchased the house for 200,000 doesn’t mean that your basis is still 200,000. So there might be a gain.
Hope this helps.
as stated before only a recapture tax may kick in here. but if it was your home, then you would not have to worry about that.
No capital gains tax on residence sold unless the gain is $ 500,000.00
If you did not pay interest you could have a problem with the IRS. If you deducted the interest paid (if any), to the IRS, you would be OK. Don’t call the IRS, chances are you will only get the wrong answer.
Check with an Accountant.
The fact that the house has no mortgage on it has no bearing on your taxes.
If you sell property for the same price you bought it for, and it is your personal property or your investment property, then you owe no tax.
If it is a rental property you have to figure your gain or loss and enter that into your tax return. Gain would result from depreciation you took on the house, and you may owe tax from that gain.