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I am over 70 & may be selling my house in the next few

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years. There is a...
I am over 70 & may be selling my house in the next few years. There is a large profit. Do I get a tax break for living for 17 yrs. in the house I
purchased a cheaper, smaller house which I currently own & plan to mov to in the next few years.
Submitted: 2 years ago.Category: Tax
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Answered in 2 minutes by:
10/13/2015
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 2 years ago
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 12,883
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
Verified

Hi,

...

Yes, if this qualifies as your primary residence (and it does - living in and owning the home for any 2 out of the last 5 years before the sale) then $250,000 ($500,000 for those filing as married filing jointly) of capital gains is completely excluded from your taxable income

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Tax Professional: Lane, JD, CFP, MBA, CRPS replied 2 years ago

Capital gain on sale = sales price minus tax basis

...

And tax basis is your purchase price plus and improvements you made to the house.

...

So, for example, if you purchased the house for 100,000 and sell for 400,000 (and you file as married filing jointly) the 300,000 gain would be completely excluded from taxation. (only 300,000 gain when 500,000 would be excludable)

...

If you are single, then only 50,000 of your 300,000 gain would be taxable

...

And capital gains are 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
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Tax Professional: Lane, JD, CFP, MBA, CRPS replied 2 years ago

Please let me know if you have any questions at all

...

Lane

...

If this HAS helped, (and you don’t have additional questions on this), I'd really appreciate your positive rating … (by clicking or touching the stars or smileys on your screen) … … That’s the only way I'll be credited a portion of what you've paid JustAnswer.

...

Thank you,

Lane

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Tax Professional: Lane, JD, CFP, MBA, CRPS replied 2 years ago

Hi,

...

Just checking back in ... Did you see my answer?

...

let me know if you need more here

...

If this HAS helped, (and you don’t have additional questions on this), I'd really appreciate your positive rating … (by clicking or touching the stars or smileys on your screen) … … That’s the only way I'll be credited a portion of what you've paid JustAnswer.

...

Let me know...

..

Lane

.

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Lane
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 12,883
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Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986

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