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BRAC - Base Realignment and Closure

The effects of a base closure can be huge - causing much stress and questions. This forum can help with the sharing of ideas, suggestions, and answers of those affected (currently or in the past) by BRAC.

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huxie1  
#1 Posted : Wednesday, March 09, 2011 12:29:59 AM(UTC)
huxie1

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I plan on selling my house in the BRAC move through DNRP. I don't plan on buying another house in the new location. What should I do with proceeds from the sale, will they be subject to capital gains tax.
EEngiNerd  
#2 Posted : Wednesday, March 09, 2011 7:19:51 AM(UTC)
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I had a paid PCS move in 2009 and no, I didn't have to capital gains, but, my reimbursement for approved selling expenses ($11k) was taxed at 30%.

SharonL  
#3 Posted : Wednesday, March 09, 2011 11:22:33 PM(UTC)
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If your house has increased in value compared to what you bought it for and you don't purchase another house within a certain period, you would have to pay capital gains on the increase.  If you purchase another house, then the gain gets rolled into the cost basis of the new house.   (this whether part of BRAC or not)SharonL2011-03-10 07:28:18
elcid89  
#4 Posted : Thursday, March 10, 2011 2:40:55 AM(UTC)
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SharonL wrote:
If your house has increased in value compared to what you bought it for and you don't purchase another house within a certain period, you would have to pay capital gains on the increase.  If you purchase another house, then the gain gets rolled into the cost basis of the new house.   (this whether part of BRAC or not)


This depends on the qualifying use and the length of time that you lived in the home. Homeowners are allowed to exclude up to $250,000 ($500,000 if filing jointly) of the capital gains resulting from the sale of a primary residence provided that they lived in the home at least 2 years of the five year period immediately preceding the date of sale.

The rules get more complicated for secondary homes or homes subjected to non-qualifying purposes (i.e. rented out), but for the vast majority of homeowners selling their primary residence, capital gains are usually almost entirely excluded.
You might be a firefighter if your kids are afraid to get into water fights with you ...
huxie1  
#5 Posted : Thursday, March 10, 2011 2:45:25 AM(UTC)
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That's what I wanted to hear - I have lived in the house as my primary residence for the past 10 years
elcid89  
#6 Posted : Thursday, March 10, 2011 2:56:15 AM(UTC)
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huxie1 wrote:
That's what I wanted to hear - I have lived in the house as my primary residence for the past 10 years


Yup. Follow the Schedule D rules to determine what part, if any, of your gain is taxable. If it's entirely excludable, it doesn't even get reported on the form.

Read the "Sale of your Home" section on page D-2 of the instructions for Schedule D. They lay it out in clear & simple terms.
elcid892011-03-10 11:02:06
You might be a firefighter if your kids are afraid to get into water fights with you ...
Retired Goose  
#7 Posted : Thursday, March 10, 2011 6:04:49 AM(UTC)
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Food for Thought: 
I was employed at Ft Monmouth, which will be closed due to BRAC '05, this year. 
 
I retired and moved to Madison AL.  I sold my house and bought another here.  I found out after I had done this, I was eligble for HAP (Housing Assistance Program) due to the BRAC announcement having a negative impact on Home Values.  I am eligible for 95% of the value the day before BRAC was announced.   Basically they take the before BRAC value subtract what I sold my house for and I get 95% of the difference.  I also received my closing cost back, but was taxed on those.
 
Not sure if you fit into this HAP benefit at all with your BRAC ,but it is worth looking into it.
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