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Returning Member

How to calculate your partial exemption for capital gains after selling home?

I am selling my home that I have had for 19 months because I got a job in another state. From my understanding we will be eligible for partial exemption. My question is wondering what the formula is for figuring out how much will we be taxed on if we are making \$200,000 profit from the sell of our home? Thank you for any help that can be provided.

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4 Replies
Level 15

How to calculate your partial exemption for capital gains after selling home?

You used the term I & we so are you & your spouse selling?  Did you both own/ live in the home for the 29 months?

Returning Member

How to calculate your partial exemption for capital gains after selling home?

Im sorry that was a mistake. My wife and I have lived in the house for 19 months.

Level 15

How to calculate your partial exemption for capital gains after selling home?

@mcthomas35 - presumably you lived in the home the entire time.   the exemption is the number of days you owned the home divided by 730.

Level 15

How to calculate your partial exemption for capital gains after selling home?

@NCperson wrote:

@mcthomas35 - presumably you lived in the home the entire time.   the exemption is the number of days you owned the home divided by 730.

The partial exemption is based on the shortest of 3 periods:

1. The number of days you owned the home

2. The number of days you lived in the home as your main home.

3. The number of days since you last used the exclusion, if you used it previously.

For example, if you bought the home Sept 30, 2019, you moved in October 1, you moved for the new job on March 1, and didn't close on the sale until June 15, 2022, you would use October 1-MArch 1 as the shortest eligible period.  Then it's a straight pro-rate.  If the shortest qualifying period was 560 days, then you divide by 2 years (730 days) = 76.7% x \$250,000 means your partial exclusion is \$191,780, or double that if you are married filing jointly and your spouse has the same ownership and residency period.