Will I have to pay taxes on $50,000 in gains from selling my house?
Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
Announcements
TurboTax has you covered during Covid. Get the latest second stimulus info here.
cancel
Showing results for 
Search instead for 
Did you mean: 
New Member

Will I have to pay taxes on $50,000 in gains from selling my house?

Will I have to pay taxes on $50,000 I will make from the sale of my home?  I have lived in the house for 15 months and must sell in order to buy a bigger house to accommodate my my mother in law who will be coming to live with us.

5 Replies
Level 14

Will I have to pay taxes on $50,000 in gains from selling my house?

To qualify for the capital gains exclusion, you must have lived in the house as your primary residence for 2 of the 5 years leading up to the date of sale.  The two years need not have been consecutive; you also qualify if you lived in the house as your primary residence for 730 days during the 5 years leading up to the date of sale.

The tax law provides an exception to the two-year rules for use, ownership and claimed exclusion when the primary reason for the sale is health, change in place of employment, or, to the extent provided in IRS regulations, “unforeseen circumstances.”   The "unforeseen circumstances" accepted by the IRS are:

  • death,
  • divorce or legal separation,
  • becoming eligible for unemployment compensation,
  • a change in employment that leaves the taxpayer unable to pay the mortgage or reasonable basic living expenses,
  • multiple births resulting from the same pregnancy,
  • damage to the residence resulting from a natural or man-made disaster, or an act of war or terrorism, and
  • condemnation, seizure or other involuntary conversion of the property.

  • So it appears that your capital gain will be subject to taxation.


    **Answers are correct to the best of my ability but do not constitute tax or legal advice.**

    New Member

    Will I have to pay taxes on $50,000 in gains from selling my house?

    Thank you for your quick response.   My mother in law moving in with us can not be characterized as an "unforeseen circumstance"?  Also, what is that rate in which I will be taxed?  Is 10% of the $50,000?  Thank you in advance for your time!
    Level 14

    Will I have to pay taxes on $50,000 in gains from selling my house?

    The capital gains tax rate depends on your tax bracket. If you're in the 10% to 15% tax bracket, your capital gains tax rate is zero. If you're in the 25% to 35% tax bracket, your capital gains tax rate is 15%. If you're in the 39.6% tax bracket, your capital gains tax rate is 20%.
    **Answers are correct to the best of my ability but do not constitute tax or legal advice.**

    New Member

    Will I have to pay taxes on $50,000 in gains from selling my house?

    It is possible that the higher income may affect other items on your tax return and result in more tax than just the 0 and 15% rates would suggest.
    New Member

    Will I have to pay taxes on $50,000 in gains from selling my house?

    Appreciated.  However, I have no idea what you guys are talking about because I am not very well versed in this subject matter.  So, if I am in 10% to 15% tax bracket I will pay nothing?  How can I figure out where I fall?  Also, would the IRS consider my mother in law moving in as an exemption to the tax?  Thanks again.
    Dynamic Ads
    v
    Privacy Settings