How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Lane Your Own Question
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10156
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
1929974
Type Your Tax Question Here...
Lane is online now
A new question is answered every 9 seconds

I just Sold my home. Do I have to pay taxes from what I have

Customer Question

I just Sold my home. Do I have to pay taxes from what I have I had left from the seller of the home
Submitted: 1 month ago.
Category: Tax
Expert:  Lane replied 1 month ago.

Hi. My name's Lane. I can help here.

...

I hold a law degree, with concentration in Tax Law, Estate law & Corporate law, a Master’s Degree, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986…

Please bear with me for a moment, while I prepare your response.

Expert:  Lane replied 1 month ago.

The way this works is that (1) capital gain = sales price minus your basis in the home (basis is your purchase price plus improvements)

...

But, (2) if you lived in the home for 2 out of the last five years before the sale, $250,000 of that gains is completely excluded ($500,000 for those married fiiing jointly)

Expert:  Lane replied 1 month ago.

Here's the IRS guidance on this:

...

https://www.irs.gov/taxtopics/tc701.html

...

Please let me know if you have any questions at all, before rating me.

...

And if you DON'T have other questions Your positive rating … (by using those the stars or faces on your screen, and then clicking “submit”) …would be appreciated!

Otherwise I receive no compensation for the work.

...

Thank you,

Lane

Customer: replied 1 month ago.
I don't Live in the house my daughter did rent the house
Expert:  Lane replied 1 month ago.

OK that changes things ... So sorry, ... I was answering based on y our comment "I just Sold my home ..."

...

So yes, now that first part of my first answer comes to play.

...

Capital gain = sales price - basis ... and basis is what you paid for the home plus any iimprovements you made.

...

Now, you DO get the lower long terms capital gains rates

...

Long-term gains and qualified dividends taxed at

  • 0% if taxable income falls in the 10% or 15% marginal tax brackets
  • 15% if taxable income falls in the 25%, 28%, 33%, or 35% marginal tax brackets
  • 20% if taxable income falls in the 39.6% marginal tax bracket
  • 25% on Depreciation Recapture
Expert:  Lane replied 1 month ago.

Also, if you DID live in the home for ANY 24 months out of the five years before the sale, then this still applies.

...

This "2 out of 5" rule is the IRS test for getting the primary residence sale exclusion on gain

Related Tax Questions