Capital Gains and Losses

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I have my home on the market for $405,000.00, I paid

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I have my home...

I have my home on the market for $405,000.00, I paid $235.000.00 about 5 yrs. ago. Will I owe capital gains tax on it when it sells. I am79 yrs. old on Social Security, my husband passed away in January this year.

Accountant's Assistant: I love the idea of making big money with investments, but there are so many things that could go wrong. The Accountant will be able to help you. Is there anything else the Accountant should be aware of?

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Submitted: 5 months ago.Category: Capital Gains and Losses
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12/17/2017
Tax Expert: Richard, Tax Attorney replied 5 months ago
Richard
Richard, Tax Attorney
Category: Capital Gains and Losses
Satisfied Customers: 56,752
Experience: 29 years of experience as a tax, real estate, and business attorney.
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Hi! My name is Richard & I will be helping you today! It will take me a few minutes to type a response to your question. Thanks for your patience!

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Tax Expert: Richard, Tax Attorney replied 5 months ago

No....you will owe no tax. Since this has been your principal residence for the last 5 years and you were married, under Section 121 of the Internal Revenue Code you can exclude up to $500,000 of gain from the sale of your principal residence. Thus, unless your gain exceeded $500,000, which it does not based on your facts, all your gain would be excluded from income under Section 121. This is a link to that Code section: https://www.law.cornell.edu/uscode/text/26/121

Also, when your husband died, the basis in his share of the house would have been increased to its fair market value also reducing any gain; and if you live in a community property state, the entire basis would have been increased to the fair market value thereby eliminating all gain.

Thank you so much for allowing me to help you with your question. I have done my best to provide information which fully addresses your question. If you have any follow up questions, please ask! If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service as Good or Excellent (i.e., 4 or 5 stars)(hopefully Excellent/5 stars!). Otherwise, I receive no credit for assisting you today. I thank you in advance for taking the time to provide me a positive rating!

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Tax Expert: Richard, Tax Attorney replied 5 months ago

Just following up. My screen indicates that you have not reviewed my response. Please let me know if you did not receive it so I can re-send it if necessary.

If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service as Good or Excellent (i.e., 4 or 5 stars)(hopefully Excellent/5 stars!). Otherwise, I receive no credit for assisting you today. I thank you in advance for taking the time to provide me a positive rating!

Thank you! Richard

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