Hi. I’ve been with TURBO TAX for years and years. Unfortunately, I can’t find my answer anywhere. I’m 67 and retired 2025. Trying to understand how to avoid a huge capital gain tax (CGT) hit this year if I sell my SECOND home, and don’t want to wait until the end of the year to file with you and get the shock of my life. 🙂
Approximate/simple numbers:
For 2025, Social Security income $35,000, plus adjusted SSI from 2024 but paid in 2025, $15,000: TOTAL SSI $50,000 Final job pay for January: $6,000.
I plan to sell my house (owned 25 years). It’s a second home, paid $200k. let’s say profit after all deductions is, $500,000. Here are my questions:
1) Is SSI counted toward total income when IRS determines income? It appears this would be a difference in paying 0% CGT or 20%*. If SSI isn’t counted, does that really mean I don’t have to pay ANY CGT AT ALL since my non SSI income under $48,350?
2) Can you confirm that a second home does not have the wonderful $250k deduction/exclusion?
3) If I DO have to pay CGT on the $500,000 profit (whine!), what are my options other than get married, delay the sale, or make the house my primary residence for two years? Can I invest the $500,000 in an IRA and avoid CGT? Then slowly withdraw as I need it and pay regular taxes vs the huge hit?)? Just looking at any options or suggestions.
4) Is CGT based on what I SELL IT FOR, or its market value?
5) Are my monthly SSI checks reduced because of sale of house profits?
6) Right now, I’m not having taxes taken from SSI as I’m confused on what IRS considers taxable. I read that it is only HALF of total SSI, or am I misunderstanding that?
I think these are questions that a lot of folks have and will benefit from your answers. lThank you!
