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TaxRobin, Tax Preparer
Category: Capital Gains and Losses
Satisfied Customers: 15328
Experience:  15+ years in Tax preparartion as well as Instructor for tax law, theory, and application
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I'm selling a house in Old Greenwich, CT. million dollars. I

Customer Question

I'm selling a house in Old Greenwich, CT. For 1 million dollars. I owe 400,000.00 on it. How much will I have to pay?
Submitted: 1 year ago.
Category: Capital Gains and Losses
Expert:  Andy4712 replied 1 year ago.

I would need to know your tax basis in the house. Your tax basis is what you bought it for plus improvements. You use this number to calculate the capital gain not the debt on it. You would take the sales price less your basis times your tax rate to determine your capital gain. The tax rate depends upon your bracket and whether it is a short term or long term capital gain.

Here is a calculator that can help you:

Customer: replied 1 year ago.
I can't calculate all that out. Here is how it is. My wife recieved it as a gift. it was worth 425,000.00 at the time. we put another 150,000.00 into it. we are selling at 1 million. I know that you have a one time exempt of 650,000.00 dollars. Are mill rate is about 10.5. We pay arounr 10,000.00 ayear. Could you answer the question bab
Customer: replied 1 year ago.
Maybe with that information or what?
Expert:  Andy4712 replied 1 year ago.

You may want to ask you accountant. From the information you provided it would be the 1 million less (450k+150k) times your rate.

Expert:  TaxRobin replied 1 year ago.

Another expert

Your cost in the house is not the value when your wife received it but the cost of the giver. When a gift is made the receiver of the gift retains the basis of the giver. Whatever the giver paid for the property plus their improvements plus your improvements($150k) is the starting point.

There is no exemption or exclusion unless you lived in and owned the house for at least 2 of the 5 years prior to sale and then that is $500,000 if married filing joint.

The value at time of gift is not important.

You have to find out the basis of the giver then add your $150k. Your gain will be the difference in the basis of the giver plus your $150k and the $1mil sale price less costs (like commissions) to sale.

Only if she inherited can you start with the value when she received and then add your improvements for basis.

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