Do I have to pay taxes on a spec house I built and sold?

Forum|Forum|4 years ago
April 16, 2022
1 reply
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I never lived in the house and am splitting the profits from the sale with my in-laws, who went in halfway with me and my husband. The house is a new construction house built specifically to sell with a construction loan. Are you required to pay taxes on the proceeds of the sale of a house? It should be around $150,000 split in half.

Not A Product Question

Carl11_2

Employee

Are you required to pay taxes on the proceeds of the sale of a house?

Since you never lived in the property as your primary residence, yes you have to pay taxes on the gain.

CaitlinB1Author

What if I use some of the profits to build another house? The funds could be used on buying land, costs for construction, etc.

Carl11_2

Employee

What you use the profit/gain for doesn't matter. The gain is still reportable and taxable. It "could" be offset by any qualified expenses claimed, assuming you are "in the business" of building/selling properties. But it doedsn't change the fact that there's no "special treatment" for your gain.