How is capital gains calculated on a home I've lived in for less than 2 years?

Answer 1

The gain is calculated as a difference between the selling price and purchase price less any improvements made to the house (you better have al receipts) and any fees associated with the two transactions, such as Realtor fees, closing costs, attorney fees, plat of survey, transfer stamps etc.
Also, please remember that you may get a break if you moved due to circumstances beyond your control, examples include but not limited to: job transfer, sickness of a family member that requires you to relocate to a different climate or some other reasons. If you have a reason like that to move, than the government will allow you to prorate the standard 250K or 500K for married couple allowance. I new someone who was relocated, and had to sell the house after just 1 1/2 years in it. Their profit on the house was about 100,000, but the the prorated allowance for them was 500,000 x .75 = 375,000, so they didn't pay any tax at all. Otherwise the tax on capital gain will be calculated just the same as any other gain, depending on how long you held the house.

Answer 2

The gain is taxed as ordinary income. The gain is determined as the dfifference between the new sale price and the original cost, less any longterm improvements, (house additions, remodeling, not simple maintenance such as painting) and any short term improvements made within 6 months to ready the house for sale (such as painting). You also deduct the closing fees on the sale of the property.

Answer 3

20% of the profit, isn't it? If you bought the house for 300k and sold it for 350k, you'd owe 10-k. I'm not sure if you get to deduct realtor fees or closing costs from the transaction.