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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 12037
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I just recently sold my first house that I bought from my

Customer Question

I just recently sold my first house that I bought from my parents to my brother with a 75000 gain. I lived in the house for fifteen years but only owned it for one year and six months. Do I owe taxes or can I still use the exclusion?
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.

Hi,

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So sorry, but you would need to have lived in the home for at least two years.

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See this from IRS:

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To claim the exclusion on the gain from the sale of a home, the taxpayer must meet the ownership and use tests. This means that during the five-year period ending on the date of the sale, the taxpayer must have:

  • Owned the home for at least two years (the ownership test), and
  • Lived in the home as his or her main home for at least two years (the use test)
Expert:  Lane replied 1 year ago.

You Do get the lower LONG TERM capital gain rate because you owned for more than year.

Expert:  Lane replied 1 year ago.

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
Expert:  Lane replied 1 year ago.

Again, so sorry to be the messenger here.

..

Please let me know if you have questions

...

Lane

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I hope you'll rate me (that's the only way we get credit for the work here) based on thoroughness and accuracy, rather than any good news/bad news content ... But if there's something you don't understand, or if you have other questions about this, please let me know.

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