If someone buys a home and gives the owner an option to buy back the home later on again. When the seller buys the property back at that price and then sells the property at a higher price on what the market price is, will they have to pay capital gains tax or not?
Yes, if there is any profit made, the government wants their fair share of course!!!
The only exception is if they MOVE IN to the house and live there at least 2 years, then they would qualify for IRC121, which allows for houses that are occupied by the owner to get $250,000 tax free for a single person or $500,000 tax free for a married couple.
So what are the advantages of having a option to buy back your home. I thought if you sold your house for $50k and had and option to buy it back for $60k and the home would be worth $100k then I would I wouldn’t pay capital gains on the $40k?