I plan to sell my home (primary residence)in California which was
purchased less than 2 years ago.  From what I understand I will be hit
with paying capital gains tax.  Therefore, I would like to know how
much my "After-Tax Cash Proceeds" will be.

Here are the information I have:

Orig purchase price:  $519k
Date purchase: December 22, 2003
Improvements:  $12,000 (no receipts)
Selling price: $ 700k
Date sold (assumption):  June 30, 2005
Comission:  2.5%
Closing expense (assumption):  2% of selling price
Remaining loan: $457,200

HI Vikielim,
Your numbers are going to inspire people wanting to invest in Cal. real estate!

The first two sites below are maybe not neutral information, but they
seem to agree.  The third one is a chat, but also agreeing and
provided the last site,
which is "the horse's mouth", if the IRS doesn't take offense.
I hope your move is job-related.

Good luck!

http://www.taxguru.org/re/primary.htm

http://www.bankrate.com/brm/news/real-estate/20041018a1.asp

http://www.reiclub.com/forums/index.php?board=39;action=display;threadid=4503

http://www.irs.gov/publications/p523/ar02.html#d0e1901

Holy cow. Don't sell for another 7 months and you are tax-free. Lease-option.

re: drewwhite-ga's comment...

Wrong!  Lease-option selling to another buyer would most likely be
characterized by the IRS as a sale on the date of
contract...vickielim-ga would most likely have to pay capital gains.

The only way to avoid the capital gains is to wait until 2 years have passed.

After sale and loan payoff, you would have $211,300.  $20,625 is what
you'd pay in capital gains...so you would have a net profit of $190675
on sale.  That includes $61,800 of principal you've already paid
for...or $128875 pure profit after all is said and done.

20625

Hello Vikielim,
One thing no one seems to have mentioned is that the IRS Publication
17 actually shows several tests for excluding the gain.  The first,
and commonly quoted, is the 2 year test.  Read: "The home was your
main home for any two years of the last 5".  The second test, and
frequently missed, offers an interesting escape for people who have
not sold a primary residence for 2 years, reading "you have not sold
or exchanged another main home during the 2 yr period ending on the
date of the sale or exchange of your home".  So, a first time home
buyer could immediately qualify for the exclusion because he has never
sold another home. So, my question for you is:  Were you a first time
home buyer when you purchased this property?  Will it be 2 or more
years since you closed on the last property?
Thanks!

Thanks everyone for contributing.

After several sleepless nights, I have decided to wait for 2 years
before 'renting' it out (instead of selling it).  supersolver, I am
not a first time buyer.

Vickie

'supersolver-ga' you are flat wrong.  The IRS publication reads 

"You can exclude up to $250,000 of the gain on the sale of your main
home if all of the following are true.

You meet the ownership test.

You meet the use test.

During the 2-year period ending on the date of the sale, you did not
exclude gain from the sale of another home."

This is not a list of exemptions but conditions which all must be
satisfied to exclude the gain from sale.