Aerovette Posted April 9, 2007 Report Share Posted April 9, 2007 I live in Texas (not sure it matters). I refinanced my house to a)pay off all bills and buy a new home. Do I owe tax on the cashout? Secondly, when I sell the home I just refinanced, will I owe tax on the money I make from the sale? I will NOT be using it toward the new home. The remaining money made from the house will pay off my fiance's bills so we can move in debt free. However, if I have to pay tax on all the equity in the house, I wil be TOTALLY screwed. I really need facts and not guesses please. What's the word good people of the forum? Link to comment Share on other sites More sharing options...
jq26 Posted April 9, 2007 Report Share Posted April 9, 2007 I live in Texas (not sure it matters). I refinanced my house to a)pay off all bills and buy a new home. Do I owe tax on the cashout? Secondly, when I sell the home I just refinanced, will I owe tax on the money I make from the sale? I will NOT be using it toward the new home. The remaining money made from the house will pay off my fiance's bills so we can move in debt free. However, if I have to pay tax on all the equity in the house, I wil be TOTALLY screwed. I really need facts and not guesses please. What's the word good people of the forum? No tax is due on the cashout. The cash is being exchanged for a loan balance, so for tax purposes you have no gain. And as long as you lived in the home for 2 years, then you can exclude $250k in GAIN above and beyond your cost basis ($500k for married couples). A few additional qualifications apply, but nothing out of the ordinary. This is from memory but these topics are searchable on the IRS website for lots of good info. Link to comment Share on other sites More sharing options...
Aerovette Posted April 9, 2007 Author Report Share Posted April 9, 2007 Fantasic. Thanks. Link to comment Share on other sites More sharing options...
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