Question about California capital gain tax on home selling?

[pinkjelly1234]

Hi
I consider selling a home and want to ask some questions.
I purchased a home as a primary residence on May 31st 2011 and lived for 1 year and half.
After that, the house was rented until Dec 1st 2015.
I'm going back to home to live. (Actually, I want to sell)

It looks like house has been owned for 5 years now after purchase.
Am I qualified for capital gain tax 0% if I live more than 6 months? ( because I previously lived for 1 year and 6months)

Some says it's calculated in a consecutive way and other says it doesn't matter.
I live in California. Current our tax bracket seems 15% (income tax)

And how can a residence length record be found?
Can it be found on tax return report if I can't find an utility bill?

And as a final question, what expense is deducted on tax? For instance, agent commission fee, home remodeling,..?

[TaxGuyBill]

It does not need to be consecutive, but because you moved in after the rental period, the will only get a prorated exclusion and therefore pay taxes on PART of the gain.  TurboTax will walk you through that situation.

[TomYoung]

Understand that the income tax benefit is NOT a "capital gain tax" of 0%, it's an amount of gain that can be EXCLUDED in reporting the gain on sale.  The current amounts are $250K/$500K depending on filing status.  California has conformed to the federal tax law in this area.  Too, California has no special "capital gains" tax; all income is taxed at "ordinary" income tax rates.

Your adjusted basis in calculating the gain will include the depreciation you took - or should have taken - during the rental period and will be taxed at special "recapture" rates.

The periods of time that you reported the house as a rental in your income tax return - seemingly something like 11/1/2012 to 12/1/2015 - you should be able to derive pretty closely from the Schedule E Worksheets you prepared for the years that the house was a rental.

Selling expenses such as Realtor commissions and the like are deducted from the selling price of the home to determine the net proceeds from sale.  Costs associated with improvements and remodeling are added to the home's original cost as part of the process of figuring out the adjusted basis.

[SweetieJean]

"if I can't find an utility bill" Utilities in your name do not prove that you actually lived there. Some  landlords keep them listed in their own names.

[pinkjelly1234]

Thank you so much for your time to answer me.
Let's say.
Home purchased $249,900 on May 31st 2011(now estimates $450,000)
Lived there until Nov 2012 (18 months as a primary residence); 1 year and 6 months
Moved out and rented out until Dec 1st 2015 (Rented for 36 months); 3 years
Move in on Dec 5th 2015 (Becomes a primary residence)

For instance
Let's say If Home owned May 31st 2011 to May 31st 2016  ( Total 5 years), and I lived for 2 years in a inconsecuitve way...
If home sold after June 2016, am I qualitied for no capital gain tax?
What is a best time I sell a home to avoid this tax? I mean is there a deadline to avoid  this tax?
Should home be sold within 5 years? If home is owned for more than 5 years, is there a capital gain tax?

My home capital gain is over $200,000 and I'm married jointly.

I appreciate all of you to read this....

Is anyone helped me how much it would be and how to calculate this tax?

Purchased home $249,900
Loan amount $115,000
Home remodeling $50,000
If home sold $450,000
Agent fee (commission 5%) $22,500
And other fee (no idea)
Our income for both $69,900 (with rental income $27,900)
This is California area

[pinkjelly1234]

Thanks for your time ! What is recapture rate? Do you know any place I can estimate my capital gain tax or other tax after selling a home? I would like to know ......

[TomYoung]

Assuming you've been using TurboTax during this time the easiest thing to do is to use your 2015 program - desktop, not online - and do a "pro forma" income tax return assuming you sell the home 12/31/15.  It won't be exact of course but it will give you a good indication.  The recapture rate is 25%.

[pinkjelly1234]

Recapture rare means a taxable tax rate??
What if I sold a home July 2015??

[TomYoung]

25% is the tax on recaptured depreciation.

[TaxGuyBill]

Did you already sell a different home (in July 2015)?  Or did you mean to say that you WILL sell THIS home in July 2016?

Based on depreciating $200,000 (price minus land, this is just an ESTIMATE), you would have claimed approximately $22,000 in depreciation.  With your numbers, it looks like you have approximately $127,500 of 'gain' PLUS $22,000 of Unrecaptured Section 1250 Gain (which is taxed at about 25%).

If you have not sold another home within 2 years of the selling date, you can "exclude" (not pay tax on) approximately 40% of the $127,500.  That gives you:

$127,500 x 60% x 15% tax rate = $11,475
$22,000 x 25% tax rate = $5500

That's about $17,000 of Federal taxes.  I don't know about California taxes, but a 9% tax rate would give you approximately $9000 in California taxes.

[pinkjelly1234]

Hi
Thank you for answering my question.
I will sell this home in June or July 2016 to avoid a capital gain tax.
There are a lot of taxes; state tax, federal tax.