Bought a house 35 years ago for $150k & sold it last year for $700k. We put about $50k into it over the years. we bought a house for $600k. Is taxable capital gain $500?

Forum|Forum|6 years ago
October 5, 2019
2 replies
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Anonymous_

Level 15

"Is taxable capital gain $500?"

Most likely not if you owned and used the house as your main home for a period aggregating at least two years out of the five years prior to its date of sale.

In that instance you can exclude up to $250,000 of the gain, or up to $500,000 if you file a joint return with your spouse.

See https://www.irs.gov/taxtopics/tc701

TomD8

Alumni - Champ

Your capital gain is $500K.

If you qualify for a capital gain exclusion as explained by @Anonymous_, your taxable capital gain may be only $250K, or even $0.

The fact that you used the proceeds to purchase another home is irrelevant. It used to be relevant until the Taxpayer Relief Act of 1997 ended that provision.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.