I will be selling my home that I have lived in for 19 months. I will be getting $90,000 in equity from the home. Will I have to pay taxes on this equity money?
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Your liability will be determined by the amount you sold the home for, minus any fees and expenses related to the sale, minus your basis in the home (what you originally paid for the home and any improvements).
When you make a home improvement, such as installing central air conditioning or replacing the roof, you can't deduct the cost in the year you spend the money. But, if you keep track of those expenses, they may help you reduce your taxes in the year you sell your house.
It depends on how long you owned and lived in the home before the sale and how much profit you made.
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.)
There are three tests you must meet in order to treat the gain from the sale of your main home as tax-free:
If you're married and want to use the $500,000 exclusion:
Yes, you will have to pay capital gain taxes on the profit, because it was not your primary residence for two years.
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