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Level 1

In my home for less than 2 years and want to sell. What percent of capital gain will I owe?

I am married and we make 85000 per year combined
8 Replies
Level 20

In my home for less than 2 years and want to sell. What percent of capital gain will I owe?

You'll be taxed on all the capital gain. While there are some exceptions, if the home was your primary residence for less than two years from the date of the sale, all of the gain is taxable at 15% minimum.
Level 20

In my home for less than 2 years and want to sell. What percent of capital gain will I owe?

You may have small or no gain, depending on your selling expenses and how much the price might have appreciated.  Your gain is the difference between the cost basis and the sales proceeds.  The sales proceeds is the selling price minus real estate commission and any taxes, plus and sales fees that are customary in your market (such as if the seller pays for the survey or inspections.)  Staging and minor repairs don't count.

Your cost basis is the purchase price, plus certain closing costs that were not deductible, like inspections, deed recording fees, and bank and attorney fees.  You can also increase your cost basis by the cost of any permanent improvements or upgrades (new deck, new floors, roof, carpet, etc.)

Whatever is left as your gain, is taxed as a long term capital gains at 15%.  

Unless you qualify for a partial exclusion due to hardship.  This must be an unforeseen hardship that is forcing you to move before the two years, such as a job change or relocation.  Other examples are given in IRS publication 523. https://www.irs.gov/uac/about-publication-523

Level 11

In my home for less than 2 years and want to sell. What percent of capital gain will I owe?

It’s complicated.  But the simple answer is: If your taxable income (TI), after deductions and exemptions,  is less than $75,900, the portion of the long term (owned more than 1 year) capital gain that raises your TI to $75,900 will be taxed at 0%. The rest will be taxed at 15%*.

 At $85K gross income and Married Filing Jointly, your TI is $65K or less. So, roughly $11K will be tax free (technically taxed at 0%) and the rest taxed at 15%. Most states do not have favorable capital gains rates, so you will probably pay state tax at ordinary income rates.

Level 4

In my home for less than 2 years and want to sell. What percent of capital gain will I owe?

I am thinking about selling my mobile home in Florida that I have only owned for a year and a half. I do own the lot. I am retired and only make $17000 in pension for income. If my sale of the home is $60,000 more than purchase price, would I have to pay capital gains tax of 15%? I have added $10,000 in improvements. Thanks for the help.

Level 4

In my home for less than 2 years and want to sell. What percent of capital gain will I owe?

I have a similar question but I have a special case. I lived in a house my mom bought for 5 years since I didn’t qualify everything was under her name. I finally bought the house from her and I want to sell but the house has only been in my name for a few months even though I’ve lived in it for over 5 years. Any exceptions to the capital gains tax for my situation?

Level 20

In my home for less than 2 years and want to sell. What percent of capital gain will I owe?


@TiffanyRM wrote:

Any exceptions to the capital gains tax for my situation?


Not really. The partial exclusion exceptions are set forth in Publication 523 (link below) and none appear to apply to your situation with respect to the two-year ownership requirement.

 

https://www.irs.gov/publications/p523#en_US_2018_publink100073096

 

However, your actual gain upon selling, absent unusual circumstances, should not be that extreme if you only purchased the house a few months ago and paid fair market value.

Level 2

In my home for less than 2 years and want to sell. What percent of capital gain will I owe?

The correct answer is real estate exception on capital gains for first 500k in equity of sold property google it and im not an accountant so the rest of u are idiots if cpa and im a constant

Level 20

In my home for less than 2 years and want to sell. What percent of capital gain will I owe?


@Mikeyraw721 wrote:

The correct answer is real estate exception on capital gains for first 500k in equity of sold property google it and im not an accountant so the rest of u are idiots if cpa and im a constant


The exclusion is $500,000 if you file a joint return with your spouse and meet the ownership test and the use test.

 

See https://www.irs.gov/taxtopics/tc701