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New Member

# Capital Gains fees for house Sold 11 months after purchase

Bought a house 3/1/2017, selling 1/9/2018.
Profit is \$54,000... and that is before subtracting \$20,00 of home improvements.

My tax bracket is under \$37,000...  will I be expected to pay 15% on the \$54,000 in 2018?
4 Replies
Level 13

## Capital Gains fees for house Sold 11 months after purchase

If you've figured your "profit" correctly then that nets out to \$34,000 after subtracting the improvements.

The sale is "short term" and will be taxed at your "ordinary" marginal income tax rates.  I'm guessing, by your reference to "15%" and "\$37,000" that you're filing "single" and expect to be in the second tax bracket, ordinarily.  As long as that \$34,000 profit keeps you within that bracket those dollars will be taxed - more or less - at a 15% rate.  But if that \$34,000 bumps you over the top dollar amount for the 15% bracket - \$37,950 - those additional dollars will be taxed at 25%

Tom Young

New Member

## Capital Gains fees for house Sold 11 months after purchase

Oh!  So, my \$34,000 profit is included in the \$37950 tax bracket!?  ... I thought that was just my income bracket?  will definitely exceed that amount if attached to my yearly income
Level 15

## Capital Gains fees for house Sold 11 months after purchase

Q. my \$34,000 profit is included in the \$37950 tax bracket!?
A. Yes. Example:
Wages and other income :  \$30,000
Short term capital gain:      + 34.000
Total Income                     =  64,000
Standard deduction               - 6350
Personal exemption              - 4050
Taxable Income                = 53,600
Top of 15% Bracket           - 37,950
= 15,560 Taxed at 25%

The smart thing to do (tax wise) is postpone the sale (closing) til 3/2/18 so that the gain is long term. In which case, a \$34K gain will have \$15,560 taxed at 15% and 18440 taxed at 0%. Tax savings \$4322.

But your gain may be lower, You also get to deduct any expenses of sale (closing costs and Real estate commission). Technically, you add them to your cost basis.
Level 9

## Capital Gains fees for house Sold 11 months after purchase

Did you use it as your Main Home?  If so, why did you move?  There are a few situations that could reduce or eliminate the taxes if it was your Main Home and you moved for qualified reasons.
v