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R. Klein, EA
R. Klein, EA, Enrolled Agent
Category: Capital Gains and Losses
Satisfied Customers: 263
Experience:  Over 20 Years experience in resolving tough tax cases
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I'm going to retire in August. I have my primary residence

Customer Question

I'm going to retire in August. I have my primary residence in Virginia. I have a second home in Maryland that is worth more. If I sell my second home in Maryland at a loss or break even, do I pay tax on the proceeds after the mortgage is paid off? Should I change my residence to the Maryland home for a few years before I sell it? I will be 66 years old this month. Thank you
Submitted: 6 months ago.
Category: Capital Gains and Losses
Expert:  levr replied 6 months ago.

There is NO income tax on proceeds.

Income taxes are applied ONLY to the gain.

The gain will be calculated on your tax return as (selling price) MINUS (adjusted basis) MINUS (selling expenses)

Your basis is generally the original purchase price.

The basis is adjusted by improvements and some other items.

That gain is added to other taxable income.

If there is NO gain - nothing is added.

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