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Capital gain taxes

Sold house in 2014 for %269,900. Sold house in 2022 $558,000. Closing costs $27,702

Improvements on house @$12,000  Adjusted gross income 2021 @20,943

How much can I expect to pay in capital gain taxes for 2021?

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3 Replies
KeithS01
Expert Alumni

Capital gain taxes

Hi, @Willow2327!

 

Assisting you with the actual calculation of they amount of taxes you may owe is not something we do, but I'll provide some guidance to help you do the calculation yourself.

There's some information missing that we need to determine this. I'm going to make some assumptions. If I am wrong, please reply back, and I'll try to point you in the right direction. For a estimate, you can use TaxCaster to help you with that. (You'll want to enter your gain under "Gains/Losses (long-term)" under "Other Income", assuming you have owned the house for 366 days or more.)

I am assuming:
1. This is your primary residence.

2. You have lived in it and owned it for 2 of the last 5 years. (These don't need to be the same.), and
3. You haven't sold another "primary residence" in the last 2 years.

If all those are true, you can exclude $250,000 of the gain ($500,000 if you are Married Filing Jointly) of the gain. You would determine the gain by subtracting your basis (cost + $12,000 of improvements + $27,702 of selling costs) from the proceeds ($558,000). If you are Married Filing Jointly and paid more than $30,298 for the house, the entire gain would be excludable.

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PoojaT27
Employee Tax Expert

Capital gain taxes

Hello,

Thank you for participating. I am assuming that you meant to say that you purchased the house in 2014 and sold in 2022. 

The law lets you "exclude" this profit from your taxable income. (If you sold for a loss, though, you can't take a deduction for that loss.)

  • You can use this exclusion every time you sell a primary residence, as long as you owned and lived in it for two of the five years leading up to the sale, and haven't claimed the exclusion on another home in the last two years.
  • If your profit exceeds the $250,000 or $500,000 limit, the excess is reported as a capital gain on Schedule D.

Any major renovations done to the house get added to the adjusted cost of the house for calculating the gain. Since I do not have information such as your filing status and if you lived in the house for 2 out of the five prior years, I cannot say how much of the capital gains will be taxable.

For more information, please see the attached article.

Tax Aspects of Home Ownership: Selling a Home 

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Capital gain taxes

You would have no capital gains tax if you qualified for the home sale exclusion because your profit would be less than $250,000.

 

You should still report the sale your tax return so IRS knows you did not make any money.

 

Sale Price$558,000
Closing costs-$27,702
Net Sales Price$530,298
  
Purchase price$269,900
Improvements$12,000
Cost + Improvements$281,900
  
Profit/Loss$248,398
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