I am trying to sell my house i had it for a year. I had a capital gain for $118k. I am married jointly and made total income of 48k.Will i will be tax free or pay taxes

[Carl]

Counting back from the date of closing, if the house was your "Primary" residence for at least 730 days of the last 1826 days you owned it, your gain will be tax exempt. Otherwise, it's fully taxable.

[Mike9241]

what is the reason for selling? there are exceptions that may apply that WOULD allow a partial exemption if you sell before occupying it as your principal residence for 730 days 

the exceptions - each has additional rules and cases

1) job change

2) health

3) unforeseen circumstances. 

if you want additional info about any of these post back in this thread.

[tagteam]

As @Mike9241 stated, you might qualify for a partial exclusion.

See https://www.irs.gov/publications/p523#en_US_2020_publink10009000

[imkhatri07]

Im selling for better school district. I was reading that long term gain is more than 1 year. And if you make less than 80k for joint filing you can be exempt. 

[Opus 17]

There are several things going on in the above comments.

1. If you owned the home at least 2 years, you can exclude the first $250,000 of gain (or $500,000 if married filing jointly.)

2. If you owned the home less than 2 years but meet certain tests for unforeseen financial hardship, you can get a partial exclusion of the gain.  These circumstances are described in publication 523.  https://www.irs.gov/pub/irs-pdf/p523.pdf

3. Selling just because you prefer a different school district would usually not qualify you for a partial exclusion.  If you owned more than 1 but less than 2 years, the gain is taxable as a long term capital gain and must be reported on your tax return. 

4. The long term capital gains rate is zero for income levels up to $80,800 for 2021, and 15% above that.  However, the gain from your home counts in determining your income, not just your wages.   Your total income will be $166,000.  With wages of $48,000, minus the standard deduction of $25,100 gives $22,900.  That means that the first $57,900 of the gain will be taxed at the 0% rate (80,800 minus 22,900) and the remaining $60,100 will be taxed at 15%. 

[imkhatri07]

Wow , Thanks for the info. Are you a accountant? Also where can I find the information you mentioned , if you dont mind me asking. Becuase most people i talk to said I have to pay 15% on my net proceess. Thanks again!

[Critter-3]

It is all in the IRS worksheet ... plug in your numbers to get the bottom line ... of course the 2021 WS is not out yet however you will get a good idea from the 2020 WS ...    https://apps.irs.gov/app/vita/content/globalmedia/capital_gain_tax_worksheet_1040i.pdf