If you meet all the criteria to exclude the sale of your home, you will need to go back through and double check your answers. How much profit did you gain on the sale of your home? Did you enter your cost basis to lower your gain?
To claim the home sale exclusion the following must apply:
- You owned and lived in the home for 2 out of the last 5 years
- You did not use the exclusion in the past 2 years
- The exclusion is worth up to $250k ($500k if married filing jointly). Anything above this would be subject to capital gains tax
If you do not qualify, the rest of your income will play a part in the tax rate. This would be a capital gains sale so your tax rate would be between 0% and 20%. The capital gains rates are as follows based on income
- Zero percent rate for the following income
- $44,625 for single or MFS
- $59,750 for HOH
- $89,250 for Married Filing Jointly
- Fifteen percent for income more than above but less than below
- $276,900 for MFS
- $492,300 for Single
- $523,050 for Head of Household
- $553,850 for Married Filing Jointly
- Twenty percent for the amount that your taxable income is over the 15% level.
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