We bought a foreclosure to live in, we had to finish it because the previous owners had pretty much stripped it, at the end of our 2 years of owning it we would like to put it up for sale and we expect to make a decent amount of money on it.
What exactly are capital gains? Is it only what we have gained? as in what we put into the home, anything on top of that? is what is called capital gains?
Our goal in buying this home was to sell it and then with the money we would profit from it, plus all that we put into it our selves in sweat equity buy a new house with cash.
My question is, we have put about $330k into the home, purchase price, and cash combined
We hope to sell it for $550 so minus closing costs and realtor fees we want to walk away with a little over $500, we still owe $212 So what does that mean with our capital gains and do we have to spend all of the gains on a new house within 90 days?
Thanks so much if you need more info just let me know