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Deductions & credits
Possibly, it depends on how much gain you have. If you owned the home at least 2 years and lived in the home at least 2 of the past 5 years, the first $250,000 of gain is tax-free. This is the section 121 home exclusion. Any gain over that will be taxed according to the normal rules. Your gains are added to your other income to determine your capital gains rates. For example, the top of zero percent rate for 2023 is $44,625. If your other income was exactly $40,000, then the first $250,000 of gains is excluded, the next $4625 is tax-free, and anything more than $254,625 is taxed at 15%.
‎July 24, 2023
10:07 AM