Capital Gains and Losses
Capital Gains Tax Questions? Ask a Tax Advisor for Answers ASAP
The section 121 allows to exclude from taxable income teh gain on teh sale of a personal residence - up to $500k for married couples filing jointly.That is NOT a deduction - but exclusion - when that gain is not added to the gross income.
Requirements for that exclusion is to own and used the property as a primary residence at least two out of last five years before the sale.If you converted your home to business use - and that requirement is not satisfied - that exclusion is not allowed.
However - the gain woudl be taxed at reduced rate - for most people - that woudl be 15% because the property was owned more than a year.
Let me know if you need help to estimate your possible tax liability.
Unfortunately - based on your situation - exclusion is not available.
Sorry if you expected differently.
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If you still have any doubts, need clarification - please be sure to ask.I am here to help you will all tax related issues.