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It depends on the capital gains and if you if you qualify for the principle residence capital gains exclusion.
You will figure out your capital gains as followed:
- purchase price
- expenses of sale
= capital gains.
If the house was your principle residence for at least 2 out of 5 years (24 months between March 2011 and March 2016), you can exclude up to 250K (500K if filing jointly) from your capital gains.
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Your state of residence or if you owned another property or not is irrelevant. If you sell a property for more than your basis (purchase price, improvements, other expenses associated with it) you have capital gains. There's a special exclusion for a property that was your principle residence for at least 2 years out of 5 years prior the sale.
If you did not live in AZ and the house is in AZ, it could not be your primary residence.
You said it was your primary residence when you bought it. When did you move out?
If you bought it for 115K and sold it for 130K, after deducting some improvements and selling expenses, including RE commission and closing costs, you will probably just break even or have little capital gains to report. Also, depending on your income, if you are in 10 or 15% tax bracket, your capital gains rate will be 0. In the worst case scenario you will pay 15% tax on the capital gains.
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