Greetings!
I may be selling a property during 2021, I purchased this property in 2014, lived there from July 2014 until October 2018, we then moved to a new home. We are now possibly going to be selling the property in 2021. We will likely make a profit of $15,000+ on the sale of the home. I would like to know how this will affect my eligibility for the Earned Income Credit when I file my taxes in Jan 2022.
I believe we will be exempt from capital gains because we lived in the property for two of the previous five years, for example, if the property sells in July 2021, if we go back five years from that date would put us at July 2016, we lived in the home from July 2014 all the way until October 2018, so I believe we would satisfy the two of the last five years requirement to avoid capital gains tax on this property since we'll be making far less profit than the allowed threshold. My only concern is how this will affect our eligibility for the EIC. Since we will be making more than a $3500 profit in unearned income (or whatever the allowed unearned income is for EIC eligibility is) will that void our eligibility for the credit, or does this not count since this will not be taxable income?
Any insight would be greatly appreciated, thank you for your time and consideration!
