I see too many questions about tax on a home sale being answered with just capital gains related info......that would be an incomplete answer. there are different taxes in a home sale that will apply
1. capital gains taxes . this one is the generally answered question and asked the most.
2. transfer tax. depends on your location. nyc for example has a 1.8% transfer tax.
3. Morgage tax. normally a buyers problem...but if you include that you as the seller will pay all closing costs..this could become your problem.
4. the trickest one of all....income tax. the net profits from the sale is also subject to income tax...this one is very misunderstood and folks will sometimes incorrectly apply capital gains logic as to how 1099-s income tax on profits are handled.
so when ever a question gets asked about tax implications of a home sale...the answer needs to include capital gains tax, income tax, at the very minimum and transfer tax and /or Morgage tax depending on the situation.
also, some folks are improperly advised to file separate to isolate the spouse from the tax windfall, but, there are things like SS IRMAA that will be levied on the spouse if the spouse files separate. a monthly SS IRRMAA surcharge that would have been 69 dollars per month will turn into 400 dollars a month just for filing separate.
proceed with cuation.
