It depends if you own the home for longer than a year. You also may be eligible for a partial exclusion of your portion of the gain if you need to move due to unforeseen events, health reasons, or work and you lived in the home prior to moving.
If you do not own the home for longer than a year, your portion of the gain would be taxable as ordinary income. A portion of this would be excludable depending on your filing status, but the rest is taxable.
If you own the home for longer than a year, it would be considered a long-term capital gain which is taxed at lower rates than ordinary income. You will not pay any capital gains if your taxable income, including the gain from the sale of the home is less than:
- $41,675 if you are single or married filing separate in 2022.
- $55,800 if you are filing as Head of Household
- $83,350 if you are married filing jointly
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