Have a Tax Question? Ask a Tax Expert
The beach house is considered a 2nd home, therefore the home sale exclusion does not apply to the sale of it.
Cost: $128,000 + qualified improvements $40,000 = $168,000 cost basis. You netted $243,000.
$ 75,000 Gain
As shown above, based on your numbers, you are looking at a $75,000 gain. You will pay 15% on the gain amount.
$75,000 x 15% = $11,250
For more detailed information relating to capital gains, you can refer to the following IRS webpage:
Let me know if I can be of further assistance to you regarding this matter.