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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13144
Experience:  15years with H & R Block. Divisional leader, Instructor
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I live in California. I bought a house 15 months ago and made

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I live in California. I bought a house 15 months ago and made around $50K capital gain (it is my primary residence). Is the gain a capital gain as far as federal and California taxes are concerned? If so - would the gains be ordinary income or short term capital gain in each instance? Last question: what are the short term and long term capital gains rates on a federal and CA level?

Robin D : Hello and thank you for using Just Answer,If this is your main home and you use it and own it as such for at least 2 years during the 5 years before you sale you would be allowed to exclude gain (which is capital gain) up to $250,000 if single and $500,000 if married filing joint. If you had to sale due to unforseen circumstances (medical or job relocation) then some of the gain could be excluded.
Robin D : The capital gains rates are Zero percent rate if your total income (including capital gain income) places you in the ten or fifteen percent tax brackets.15% rate if your total income (including capital gain income) places you in the twenty-five percent tax bracket or higher.
Robin D : The top capital gains tax rate in California at the state level is 13.3 percent, the highest in the nation
Robin D : As you held the property more than 1 year and 1 day it is long term.
Customer: Thanks. My non-registered domestic partner who owns 50% of the house with me quit her job in early 2013 and has been trying to start up her own business. So far she has made around $10K this year. The other reason is that her kids are moving to Texas with her ex-husband and she wants to live close by them. Even though I am earning enough money to pay the ENTIRE mortgage SHE has less money coming in than going out and the cost of living is much cheaper in Texas where we are moving to. Any ideas?
Customer: We live in the house together. It is our primary residence.
Robin D : As you have not lost your job and the sale was purely voluntary you would not be allowed to exclude.
Robin D : Are you positive you sold for $50000 more then your cost?
Robin D : I ask because many people think they pay tax on whatever they did not turn over to the bank or calculate their true gain incorrectly.
Customer: Yes, we made over $100K between us (home is in both names). We can adjust cost basis which includes acquisition and sales costs and improvements. Correct?
Robin D : Your basis is the cost plus improvements while you owned. Then the difference in that and the sales price (less commissions and costs to sale) would be your gain or loss
Robin D : You are correct
Robin D : Had to ask though.
Robin D : Wish I could tell you differently.
Customer: We installed a new AC unit, a whole house fan, and a furnace
Robin D : Those add to the basis
Customer: OK. Thanks
Robin D. and other Tax Specialists are ready to help you
Customer: replied 3 years ago.
Can I ask you another question on this one?
If it is about the sale of course.

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