I'm single. If I sell my primary home for $900 (current basis is $250K) and buy a $600K home what is the tax implications?

posted

What you do with the sale proceeds and profits doesn't matter anymore. The rules about rolling it over stopped years ago in 1997.

For a primary home, if you owned and lived in your house for 2 out of the last 5 years when you sell you can exclude the gain up to $250,000 for single or 500,000 for married from tax. You can not take a loss on your tax return.

If you used it in your business you will also have to recapture any depreciation you took or could have taken. So that may be taxable.

$900,000 - $250,000 = $650,000 long term capital gain (reduced by any expenses of sale, e.g. broker commission). You may exclude $250,000 ($500,000 if married filing jointly)

Long term capital gain (LTCG) are partially taxed at 0%, 15%, 20% and/or 23.8%, depending on your other income.

Try this tool https://turbotax.intuit.com/tax-tools/calculators/taxcaster/?s=1. Enter your regular income first to see the regular tax. Then add the sale to see the effect.