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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 sold a house and closed 3 days short of living in it

Customer Question

I sold a house and closed 3 days short of living in it for two years.
Purchased at 160k
Sold at 229500
2nd mortgage payoff was 15900
I received a check for 73256.00
My mother passed in sept 2015 and willed her home to myself and my two sisters. I have paid them 40k each for their share of the home.
In 2014 I sold a house and lost around 16k on the purchase price of that home before buying the home recently sold.
Will capitals gains affect me with being three days short of the two years? I don't remember if we use the loss on the prior home on the taxes for year
Submitted: 3 months ago.
Category: Capital Gains and Losses
Expert:  Lane replied 3 months ago.



First lets make sure that you misssed the target.


Either 24 full months or 730 days will satisfy the two-year ownership and use.


Can you give me your closing dates on both ends of that time frame? (closing date as buyer and closing date as seller for the home in question)

Customer: replied 3 months ago.
June 27,2104
June 24,2016
Expert:  Lane replied 3 months ago.

This is 728 days, so sorry.


Your losses from the previous sale can be carried forward to lower the amount of the gain.

Expert:  Lane replied 3 months ago.

You should also know that this is a long term gain, so will get the lower long term capital gains rate.


Long-term gains are taxed at

  • 0% if taxable income falls in the 10% or 15% marginal tax brackets
  • 15% if taxable income falls in the 25%, 28%, 33%, or 35% marginal tax brackets
  • 20% if taxable income falls in the 39.6% marginal tax bracket
Customer: replied 3 months ago.
The date of the 27th came from my realtor. I have my last check from the sale of my house was June 26 2014 which would've been the actual closing date. One extra day but dont know if that would make a difference?
Expert:  Lane replied 3 months ago.

Actual closing date (on both ends) is the date that matters, so sorry ... You're certain of the closing date on the sale as well?

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