How to calculate capital gain tax payable on a home when sold at a price much higher than what...
was paid when it was purchased.
A taxpayer can exclude up to $250,000 of the gain on the sale of the taxpayer's main home if all of the following are true:
The ownership test is met. (owned the property for 2 of the last 5 years.)
The use test is met. (used the home as the primary residence for 2 of last 5 years)
During the 2-year period ending on the date of the sale, the taxpayer did not exclude gain from the sale of another home.
A taxpayer can exclude up to $500,000 of the gain on the sale of taxpayer's main home if all of the following are true.
He is married and files a joint return for the year.
Either the taxpayer or his spouse meets the ownership test.
Both the taxpayer and spouse meet the use test.
During the 2-year period ending on the date of the sale, neither the taxpayer nor the spouse excluded gain from the sale of another home.
The gain is taxed as a long term gain. The tax is computed on the amount of the sale after deduction the $250K or $500K.
You really should let a professional tax preparer work this out for you. There may be other considertions.
by Pankaj Pathak 7 years ago
Capital Gains Tax India on Sale of Residential PropertyCan somebody please help me understand the income tax treatment of capital gains tax on sale proceeds of residential property?
by Patty F 5 years ago
What does one do with the capital gain earned from working out?This is when one has reached that feeling that's needed to remind themselves it was worth all the sweat and time?
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