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I purchased a condo in 2009 for 129K as my primary resident. Sold it in 2017 for 187K. I've had renters since 2013. Am I required to report capital gains?
Property was bought with a person whom I was never married too. All proceeds received by me.
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June 3, 2019
10:22 AM
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Deductions & credits
Yes. To qualify for the home sale exclusion, you needed to sell the condo within 3 years of moving out (you must have lived in the home at least 2 years of the 5 years prior to sale).
Job relocation is an exception to the 2 year rule. Your new job location must be at least 50 miles farther from the sold home than the old job location. You are entitled to a prorated amount of the $250,000 ($500,000 married) exclusion. Example : if you lived in the old home 438 days you could exclude up to 60% {438/(365x2)} or $150,000. The exception is allowed if the move was for employment or health reasons or "unforeseen circumstances".
June 3, 2019
10:22 AM
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Thank you. I am thinking of buying a new home How much should I set aside though in taxes for the gain?
June 3, 2019
10:22 AM
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Not enough information to tell. However, your taxable gain will be 187K - 129K + Capital Improvements - Depreciation Taken or Required to Have Been Taken. Depreciation will be taxed at a maximum of 25%; Capital Gains Tax Rate will depend on your other income. I suggest you consult a tax professional if you are unsure about how the taxation will work.
June 3, 2019
10:22 AM