Have a Tax Question? Ask a Tax Expert
Hello and thanks for trusting me to help you today. I am a tax adviser with over 15 years of experience.While you would not be generally allowed the exclusion of gain because you fall short of the time (2 out of the last 5 years prior to sale use as main home and own), there are exceptions.
Have you looked into thsoe to see if you can use any of the exclusion yet.
A period of nonqualified use does not include:
Any portion of the 5-year period ending on the date of the sale or exchange after the last date you (or your spouse) use the property as a main home;
Any period (not to exceed an aggregate period of 10 years) during which you (or your spouse) are serving on qualified official extended duty:
As a member of the uniformed services;
As a member of the Foreign Service of the United States; or
As an employee of the intelligence community; and
Any other period of temporary absence (not to exceed an aggregate period of 2 years) due to change of employment, health conditions, or such other unforeseen circumstances as may be specified by the IRS.
We have looked at the exclusions and so far we don't meet any of them.
That is unfortunate.If you cannot use the exceptions above then you would calculate your exclusion by multiplying the gain by the following fraction:
Your tax rate will be determined on your total income
You will need to report the sale and the gain will be added to your total income for the year.
If you file joint your rates are as follows:
ok so we have only owned the house for 18months at the time that we sell the house, i think we will fall into to 15% taxable income range
Then your Capital rate will be 0
You will have only ordinary tax on teh gain
oh ok so i think ordinary tax rate is around 6%, does that sound right?
For state yes the tax rate is 6%
ok thanks! i feel a lot better about that rather than what somebody had mentioned to us! Thanks again!
You are most welcome. Your positive rating is always thanks enough.
I really enjoyed working with you – please feel free to request me again when you come back to ask another question.You will find the request feature when you come back under your MY QUESTIONS section.
oh ok will do have a great day!!