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emc011075, Tax adviser
Category: Tax
Satisfied Customers: 2650
Experience:  IRS licensed Enrolled Agent and tax instructor
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I bought a villa that I hate. I still own the villa my

Customer Question

I bought a villa that I hate. I still own the villa my husband and I lived in, but he has died. I want to move back to the villa where he died. What are the tax implications and other inplications
Submitted: 7 months ago.
Category: Tax
Expert:  emc011075 replied 7 months ago.

Hi. My name is ***** ***** I will be happy to help you.

How long have you used the villa as your principal residence, the one you want to sell?

Tax implication depends on your capital gains. Here's how you calculate your capital gain/loss:

Sales price

- purchase price

- improvements

- expenses of sale, including RE commission

= capital gains/loss

Next, you will add the capital gains to your other income and will be taxes as followed:

in 10 - 15% tax bracket - no capital gains tax

in 25 - 35% tax bracket - 15% capital gains tax

in 39.6% tax bracket - 20% capital gains tax.

US has progressive tax system. It means that some of your income will be taxed at 10%, some at 15%, 20% or 25%. Here are the tax brackets:

Make sure you are looking under correct filing status.

Customer: replied 7 months ago.
I have only lived here for about 6 months. My husband never lived here.
Expert:  emc011075 replied 7 months ago.

Ok. This will not qualify you for the exclusion. You would have to live there for at least 2 years. How much of the capital gains are looking at?

Expert:  emc011075 replied 7 months ago.

Unless you are in a hot real estate market, you will probably not to much capital gains to report.

Expert:  emc011075 replied 7 months ago.

Any questions?

Expert:  emc011075 replied 7 months ago.

I see you offline now. So if this answered your question, please take a moment to rate my response so that I may receive credit for assisting you today. You find the rating bar on the top of the page – 5 stars. However, if you need clarification, or want to discuss this issue further, let me know. Thank you.