Hi,
I am trying to estimate what I will net from the sale of my home that my husband and I have lived in for over 10 years. I've researched this on the internet and I'm confused about what tax tables I use to determine the tax rate. Here's an example using fictional numbers for some of it:
- Paid $850,000 for house
- House sale estimate is $2,000,000
- We qualify for $500,000 capital gains exclusion
- Cost of selling is: 100,000 in commissions + Fees during closing of home sale: 10,000
- Improvements to house: 50,000 so far + Improvements to get ready for selling: 20,000
- Our income for 2019 will be $50,000 (real number)
I assume Cost Basis is 850,000+50000+20000=920,000 Correct?
Net proceeds from sale would be: 2,000,000-100,000-10000=$1,800,000 Correct?
So, do I take 1,800,000 - 920,000- 500,000 (exclusion) = 380,000 my taxable capital gain, correct?
The final question: So, Is my ordinary income going to be taxed at 12% as defined in the 2019 tax tables and the 380K taxed at 15% per 2019 long term capital gain tables or are the two amounts combined? Is it that simple?
Thanks in advance for any help.
