Is it a good idea to keep the cash after selling a house?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Your husband is nuts, as are many of the previous posters.

I agree, I am working hard to fully pay my mortgage off.

I agree too. I am working hard at getting rid of my mortgage.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Your husband is nuts, as are many of the previous posters.

I agree, I am working hard to fully pay my mortgage off.

I agree too. I am working hard at getting rid of my mortgage.

You're crazy .... if paying off your mortgage is your goal then make extra payments throughout the year WHEN YOU CAN or when you feel like it. Don't pour all your money into a down payment and then be cash poor.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Ask an accountant. There could be tax penalties for not reinvesting in your new home.

Not for selling your personal residence and buying another personal residence.

OP, how much do you have in liquid emergency savings and how much in retirement?

All I can tell you is that my parents were hit with a $400K tax bill for not putting the entire cash from one primary residence into another.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Your husband is nuts, as are many of the previous posters.

I agree, I am working hard to fully pay my mortgage off.

I agree too. I am working hard at getting rid of my mortgage.

You're crazy .... if paying off your mortgage is your goal then make extra payments throughout the year WHEN YOU CAN or when you feel like it. Don't pour all your money into a down payment and then be cash poor.

Cash poor? Why would anyone need $100K or $200K in cash? Unless you are going to do a once-in-a-lifetime drug deal....

[Anonymous]

Put it all in black in vegas

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Ask an accountant. There could be tax penalties for not reinvesting in your new home.

Not for selling your personal residence and buying another personal residence.

OP, how much do you have in liquid emergency savings and how much in retirement?

All I can tell you is that my parents were hit with a $400K tax bill for not putting the entire cash from one primary residence into another.

Was this before the Clinton administration?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Ask an accountant. There could be tax penalties for not reinvesting in your new home.

Not for selling your personal residence and buying another personal residence.

OP, how much do you have in liquid emergency savings and how much in retirement?

All I can tell you is that my parents were hit with a $400K tax bill for not putting the entire cash from one primary residence into another.

Was this before the Clinton administration?

Yeah I'm wondering when this happened. And also how your parents netted well more than a million on a real estate sale even including the cost of their new residence.

[Anonymous]

We once sold our house...put $265K in the bank and didn't buy for 3 yrs after that. no penalty. then again, we got out just about what we put in. 100% of the down payment and nothing more.

[Anonymous]

There is a $250k capital gain exemption for a single person or $500k for a married couple.

That means that you don't pay capital gain tax (which I think it currently 15 percent) if your GAIN is less than $250k/500k. Gain is the profit that you make having subtracted the cost of the house (what you paid plus any improvements) from the sale price (minus any sales costs).

There is no requirement that the proceeds need to be spent on another primary residence, or that anything has to be done with them.

The rules for investment properties are different and there is a procedure called a starker exchange that helps avoid capital gain tax by rolling over your funds into a similar property. PP may have got these confused.