1) So, I have lived in my home for 7 years. in '99 it was purchased for $155K. it is now worth $290K. I simply want to live in an apartment and invest this money in mutual funds. How can I calculate the capital gains I need to pay out?
2)
$290K-$155K=$135K That is under $250K, what exactly is the $250K exclusion?
2006-10-28 22:46:21 · 3 answers · asked by 33ea 3 in Business & Finance ➔ Renting & Real Estate
At tax time you'll report the sale on your taxes, Schedule D I think, and that's where you'll calculate the gain.
What you sold it for- (what it cost to buy it+capital improvements)- cost to sell it = gain.
If gain is under 250k you don't pay taxes on sale of a home of 2 years or more.
2006-10-28 23:54:30 · answer #1 · answered by open4one 7 · 1⤊ 0⤋
Because you have lived in the house for more than two years it quailifies as your personal residence. The gain on sale is as simple as your calculation unless you have made improvements, if so the cost of these improvements would be subtracted from the gain. Since the gain is less than $250,000 you won't have to report the sale. This exclusion of gan can be done by you every three years for each personal residence you ever own.
2006-10-29 07:34:08 · answer #2 · answered by waggy_33 6 · 0⤊ 0⤋
IRS: Selling your Home Publication: http://www.irs.gov/publications/p523/index.html and http://www.irs.gov/publications/p523/ar02.html
IRS: Home Sale Exclusion rules, publication: http://www.irs.gov/newsroom/article/0,,id=105042,00.html
2006-10-29 09:10:42 · answer #3 · answered by newmexicorealestateforms 6 · 0⤊ 0⤋