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I have a townhome that was too small wife myself and 2

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I have a townhome that...
I have a townhome that was too small for my wife myself and 2 children. We lived in it for 8 years then moved out and rented a larger home because we could not sell at the time. We have never purchased another home only rented one. We are selling the town home and will make about 120k on sale will we have to pay Capitol gains?
Submitted: 2 years ago.Category: Tax
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Answered in 4 minutes by:
3/3/2016
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 2 years ago
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 14,212
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
Verified

Hi,

...

The test for excluding capital gains on sale is the time and use test; (having lived in the home for two out of the last five years prior to sale)

...

and this can be ANY 24 months during the last five years (doesn't have to be continuous)

...

If your situation meets this test then 250,000 of gain (sales price minus basis) can be excluded from your taxable income ($500,000 for those filing as married filing jointly)

...

If you DO meet the requirements you can sign a form at closing stating that this is the case and there will be no 1099-S, therfore no need to report the sale at all.

...

Please let me know if you have questions

..

Lane

...

...

I hold a JD (Juris Doctorate, a doctoral degree in the law), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP® and CRPS designations. - I’ve been providing financial, Social Security & Medicare, estate, corporate & tax advice since 1986.

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

Hi,

...

I’m just checking back in to see how things are going.

...

Did my answer help?

...

Let me know…

...

Thanks

Lane

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Lane
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 14,212
14,212 Satisfied Customers
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986

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