Your gain on the sale of your home would be your selling price minus your cost basis.
Your cost basis consists of the price you paid for the house, plus any major improvements, plus fees you paid when you purchased the home such as abstract fees, legal and recording fees, owners title insurance and transfer taxes. Then you would deduct your selling costs to arrive at your gain on the sale of your home.
If you owned and lived in the home for 2 out of the last 5 years, then you may qualify for the home sale exclusion which would exclude up to $250k ($500k if married filing jointly) of the sale of your home. In order to qualify you must not have used the home sale exclusion in the past 2 years.
If you do not qualify, the rest of your income will play a part in the tax rate. This would be a capital gains sale so your tax rate would be between 0% and 20%. The capital gains rates for 2024 are as follows, they are based on income:
- Zero percent rate for the following income
- $47.025 for single or MFS
- $63,000 for HOH
- $94,050 for Married Filing Jointly
- Fifteen percent for income more than above but less than below
- $291,850 for MFS
- $518,900 for Single
- $551,350 for Head of Household
- $583,750 for Married Filing Jointly
- Twenty percent for the amount that your taxable income is over the 15% level.
To enter the Sale of a Home select the following:
- Federal
- Income
- Sale of Home under Less Common Income
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