Do I have to pay Capital Gains Tax on sale proceeds of my house?

This is an important question for any homeowner considering selling their home. Generally, the profit a seller makes when selling their home may be taxable as capital gains. Capital gain is calculated (roughly) as the difference between the sales price and what seller originally paid for the home. Seller may be able to exclude this gain from taxable income if seller has owned and used the property as their principal residence for at least two years of the five year period ending on the date of sale.
If you are single, up to $250,000 of the capital gains realized on the sale may be excluded from an individual taxpayer’s income. If you are married couple filing jointly, up to $500,000 may be excluded. This exclusion cannot be taken more than once every two years.
The rule: Exclusions of Gains from Principal Residence (26 U.S.C. § 121 also cited as IRC § 121) is fairly complicated and it is best to speak to a CPA or tax attorney for your individual situation.
By | 2018-05-04T02:41:31+00:00 January 13th, 2017|Sell|Comments Off on Do I have to pay Capital Gains Tax on sale proceeds of my house?

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