What is the name of your state? Az. We sold our second home in Ca. in May '06. After paying the mortgage, all the fees, and commissions we made about $174K. Is this taxable income? I file married joint. In Dec. '05, I inherited some mutual funds from a trust, I sold about $90K of these funds, is this taxable?
Unless the home in CA was your principal residence for 2 of the last 5 years, you are going to have to pay taxes on your gain. Your taxable gain is not the amount of money you walked away with. Some of that would have been your equity.
Your taxable gain is the difference between the amount you paid for the home, plus the cost of any improvements, plus selling costs, and the price at which you sold the home.
The mutual funds sale is also a reportable event, and again, you will be taxed on your gain only. Your taxable gain is the difference between the fair market value of the shares when you inherited them, and the price at which you sold them.
Please see a tax professional to handle your return this year. There is too much money involved here to risk making any errors.
