For contributing Roth IRA, does capital gains from a sale of a main house add toward MAGI?

greytail · ‎February 16, 2022

My income won't be over the Roth IRA contribution limit but I'm not sure if I need to worry about selling property of the main house. I understand it will be tax-free since I lived at the property for over 10 years.

PattiF · ‎February 16, 2022

No, you generally do not need to worry about the sale of your main house increasing your MAGI.

You can exclude a gain of $500,000 on the sale of a house if you are filing as married filing joint, or if filing as single, the exclusion from income is $250,000.

For example, if you purchased your house for $100,000 and sold it for $350,000 filing as a single person; then there is no capital gain income.

Publication 523 from the IRS has information about the sale of a personal home.

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PattiF · ‎February 16, 2022

No, you generally do not need to worry about the sale of your main house increasing your MAGI.

You can exclude a gain of $500,000 on the sale of a house if you are filing as married filing joint, or if filing as single, the exclusion from income is $250,000.

For example, if you purchased your house for $100,000 and sold it for $350,000 filing as a single person; then there is no capital gain income.

Publication 523 from the IRS has information about the sale of a personal home.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

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For contributing Roth IRA, does capital gains from a sale of a main house add toward MAGI?