We are selling our home in Seattle and relocating to California. The value of our home has risen by more than the $500k exclusion for a married couple, even when we take out expenditure on improvements. Will we have to pay capital gains tax on the extra profit even if we are re-investing in another property in California as our main home?
2006-11-04 08:59:43 · 2 answers · asked by Paul T 1 in Business & Finance ➔ Taxes ➔ United States
Because you are married and you both ahve lived in the home you will each be able to exclude $250,000 of the gain from your taxable income, or a total of $500,000. Any gain above this is taxed at 15% for federal taxes and at whatever your state rate is. Not a bad deal.
Reinvesting went away when they did away with once in a lifetime $125,000 exclusion.
2006-11-04 10:40:27 · answer #1 · answered by waggy_33 6 · 0⤊ 0⤋
Yes...I think they eliminated the roll-over exception.
2006-11-04 09:04:08 · answer #2 · answered by feanor 7 · 1⤊ 0⤋