Capital gains and over 1 year in house, less 2 complete years

[sharona2u2]

We sold a home in Colorado March 2023, moved to Nevada bought hose March 2023.  Moving back to Colorado, selling Nevada home in November or December 2024. What are the penalties for capital gains since it will be less than 2 years?  Looks like on Turbo Tax last year when I did taxes we (married filing jointly) did not have a gain or loss.  The worksheet amount for column h is zero. 

[DoninGA]

You may be eligible for a partial capital gain exclusion when you sell your primary home and you have not lived in the home for at least two years in the 5 year period on the date of sale.  The exclusion is calculated by the number of months you lived in the home, eg X/24 * exclusion.

For example if you owned and lived in the home for 20 months on the date of sale and you are filing as Married Filing Jointly the exclusion would be 20/24 * $500,000 = $416,667

Go to this IRS website for Publication 523, Selling Your Home, page 6 - https://www.irs.gov/pub/irs-pdf/p523.pdf#page=6

You can meet the requirements for a partial exclusion if the main reason for your home sale was a change in workplace location, a health issue, or an unforeseeable event.

Gain or Loss = Sales Price minus Sales Expenses minus Adjusted Basis (Purchase Price plus the cost of improvements prior to the sale)

[Opus 17 · Accepted solution]

Because you owned and used the home as your main home for less than 2 years, you don't get any exclusion (even if you were to not use the exclusion in 2023) unless the reason you are selling is due to one of the unforeseen circumstances listed in publication 523.  If you don't qualify, you will owe capital gains tax on any gain, at the long term capital gain rate (15% or 20% depending on your other income.)

[sharona2u2]

If your taxable income is less than 92,000 for 2024 taxes then capital gains would be 0%.  If over that amount it would go to 15%, am I reading that correct?

[Opus 17]

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@sharona2u2 wrote:

If your taxable income is less than 92,000 for 2024 taxes then capital gains would be 0%.  If over that amount it would go to 15%, am I reading that correct?

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Yes, but the income still stacks.  If your total income including capital gains is <$92,000, the capital gains portion will be zero.  But if your other income is <$92,000 and capital gains puts it over that threshold, the amount over $92,000 is taxed.