My grandma has lived in the same house for 60 years and plans on selling it. She bought it for $16,000 and it is now worth let's say $716,000 for ease of numbers. She only has $1,300 of income each month. Since her income is less than $47,025, does she qualify for the 0% long term capital gains tax rate when she sells it?
Or does the profit of the house ($700,000) count towards her income for the year and now she will have to pay 0% of long term capital gains for the first $47,025 of income, 15% for her income $47,026 to $518,900, and 20% for her income $518,900+? Also, she can qualify for the $250,000 reduction since she has lived there for 2+ years and it's been her primary residence, right? If someone can get me a rough estimate on the taxes she will have to pay that would be much appreciated.
