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Ellen, Consultant
Category: General
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Experience:  attorney and legal researcher
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I am selling my house and will not make enough to have to pay

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I am selling my house and will not make enough to have to pay capital gains taxes. At the end of the year, will the amount I make on the sell count as income? Taxed at the same rate as my income?
Submitted: 5 years ago.
Category: General
Expert:  Ellen replied 5 years ago.

Thank you for your question. I am happy to assist you.

I am a lawyer with 25 years experience. While I am not your lawyer and do not represent you, I will endeavor to provide you with legal information through this open and nonconfidential forum.

If the house has been your primary residence for 2 out of the last 5 years, you may not be required to pay tax on your gain. The Taxpayer Relief Act of 1997 allows a $250,000 exclusion from the tax on the sale of your principal residence provided that you have lived in the home for at least 2 of 5 years prior to sale.

Under IRC § 121, $250,000 ($500,000 if married filing jointly) in gain on a taxpayer's principal residence may be excluded from income, if the property is owned and used by the taxpayer as his or her principal residence for 2 of the previous 5 years (including the year of sale). The IRS requires at least 730 days of residence during the 5 year period.
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