Retirement tax questions

The Long-term capital gains tax rates for the 2024 tax year are as follows:

So to add to your fact pattern, you have been in the house for 25 years at this point.  I am assuming you have made at least one capital improvement during this time.  Publication 523 should be looked at.  Specifically page 10.  This is just one of the areas you should look at:

Additions

Bedroom, Bathroom, Deck, Garage, Porch, Patio

So what you paid for the home $81K  is not your adjusted cost basis.   Your adjusted cost basis would include all the improvement that you have made over your long-term home ownership.  

Also remember that the costs of the purchase are additions to the $81K you paid for the home.   When you sell the home those costs are also adjustments.

I would go over this all before seeing what you think your tentative gain is.

Now to answer the last part of the question, no one knows what future tax policy will be.  The Section 121 exclusion predates the Tax Jobs and Cuts Act that expires at the end of 2025.   So your guess is as good as mine on this.   After you recalculate what your tentative gain is you can make a better decision.  

Thanks again for the question @jf313   

All the best,

Marc 

Employee Tax Expert