sold Primary home

Forum|Forum|2 years ago
October 25, 2023
1 reply
16 views

I sold my Primary Home in 2023. It was purchase in 1991 for $129,000. and sold for $460,000. how do capital gain tax work?

Ask the Experts - Extension - Sept 2023

carmen_t

Employee Tax Expert

Hello and thank you for your question. You are correct and selling a primary home may have potential tax consequences related to capital gains. I usually break down the calculations using the following formulas:

Basis Calculation: Capital Gains Calculation:

Original Purchase Proceeds

Improvements (Less selling expenses, i.e. commissions, closing costs, etc.)

(Less depreciation recapture, if any) (Less new basis)

New Basis Capital Gains

Please note that since this relates to a primary residence if you meet the qualifications the homeowner exclusion applies. I will also include a link from our support site that is helpful. Have a great day!

From TurboTax "Tax Aspects of Home Ownership: Selling a Home"