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PhillipB EA
PhillipB EA, Accountant
Category: Capital Gains and Losses
Satisfied Customers: 704
Experience:  Enrolled Agent with 8 years experience in tax return preparation, representation, and taxpayer consultation
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What would the capital gains tax be on a house purchased in

Customer Question

What would the capital gains tax be on a house purchased in 1996 for $489 & sold for 1.5 million?
Submitted: 7 months ago.
Category: Capital Gains and Losses
Expert:  PhillipB EA replied 7 months ago.

Thanks for using! I will do my best to provide you with a clear and concise answer to your tax question based on the information you have provided.

It depends on whether the home was your main residence for two of the last 5 years, if the home was used as a rental property during any of the year in which you owned the home, your filing status, and your other income.

If the home was your main residence, you file married joint, and there was no use as a rental, the taxable gain would be 511,000 dollars (1.5 M - 486k - 500k home sale exclusion = 511k taxable). The gains rate will be 23.8% on a gain this large. The tax would be roughly 122k.

If any of these factors are different, the tax result will be higher.

If there are any other questions or concerns or other factors for my consideration, please reply to this answer so that I may assist you further. If this answers your question, please rate my performance between 3 and 5 stars so that I receive credit for my work. Thanks for your business.

Customer: replied 7 months ago.
Thanks. Never rented. Lived there going on 20 years. Looking to see how much can be given to a charity 501(c)3 as a dollar to dollar ratio for charity vs taxes due. I.e. Donating the $511 k vs the $122 k? Clear?
Customer: replied 7 months ago.
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call. Let me know if you need more information, or send me the service offer(s) so we can proceed.
Expert:  PhillipB EA replied 7 months ago.

Unfortunately, I am at home this weekend alone with my kids. So, having a productive phone call might be an issue for the weekend. If you'd like we can set up an appointment for a phone call on Monday morning?

In regards ***** ***** the money, the exact result depends on other income and how much of the gain you are considering donating. For example, if your only income is the gain and you donate the entire taxable amount, you would owe at least $9,918 because of the net investment income tax from Obamacare.

If you let me know a rough figure for your other income, itemized deductions, and exemptions (I assume there is only 2, one for you and one for your your spouse), I can provide you with a few estimates of what the tax would be depending on how much gain you donate.

If you'd like a phone call on Monday, let me know a time that would work.

Customer: replied 7 months ago.
Monday will work. Only one person. Dell retirement stock. Social security. Was making $350k income pre retirement. Don't know EXACT taxable income status other than that. House was homesteader in Austin TX. Check
Customer: replied 7 months ago.
Phone is(###) ###-####
Expert:  PhillipB EA replied 6 months ago.

Hi, Sorry I did not get back with you yesterday. I am available now. Please accept the premium services offer, and then I will call.

Expert:  PhillipB EA replied 6 months ago.

I will be available until 4 pm your time today. If that will not work, I could refer you to a colleague expert on the forum or we could try first thing tomorrow.

Expert:  PhillipB EA replied 6 months ago.

Let me know if tomorrow will work. If not, I will opt out and refer to a trusted colleague for a phone call tonight.

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