Captial Gains Tax Exempt

[scarr416]

Am I correct in reading that you only have to pay capital gains tax if your taxable income is under $48,850 I do not have to pay capital gains tax on my home sale profit?

[MindyB]

Yes, you are close, the 0% rate for long-term capital gains is valid for singles with taxable income of up to $47,025 in 2024 ($48,350 in 2025).  If your income, including the capital gain is in the 0% bracket, there is no capital gain tax.

You may also be able to exclude the gain on the sale of your home if you lived in it for 2 out of the last 5 years before the sale. A single person can exclude $250,000 under this rule.  See:  See: Qualifying for the exclusion

[scarr416]

Sorry - want to clarify....

So I have lived in the house for 20 years.

I am single, filing Head of Household

My capital gain after the $250,000 exclusion would be $177K

My taxable income for 2024 was $36K and I'm not expecting a change.

Do I fall in the 0% tax bracket for capital gains?

[MindyB · Accepted solution]

Unfortunately not, because your taxable income is now $213,000 (36k+177k).  So you'll fall into the 15% bracket. See: 2024 Long-Term Capital Gains Tax Rates (for filing in 2025)

[rjs]

The brackets for long-term capital gain are based on your total taxable income, including the capital gain.