I just sold my house I lived in for 12 years and made a profit of 120,000. Should I worry about it?
2007-03-01 09:33:11 · 6 answers · asked by LIVE4Kids 2 in Business & Finance ➔ Renting & Real Estate
BTW, I live in California.
2007-03-01 09:37:39 · update #1
A capital gain is profit realized from the sale of an asset. Your home is an excellent example of an asset that normally increases in value over time. When you sold your home, you realized a capital gain of $120,000.
If you lived in your home as your principal residence for 2 of the 5 years immediately prior to the sale you may be able to exclude some or all of the gain from taxes.
If you are a Single taxpayer, you may exclude up to $250,000 in gain from taxes. If you are married filing a joint return you may exclude $500,000 in gain from taxes.
Since your gain is "only" $120,000, you should be able to exclude all of the gain from taxes. The only thing that would bar you from excluding the gain would be if you are married and file a separate return from your spouse. Hopefully you're NOT in that bucket!
Enjoy your windfall!
2007-03-01 09:52:03 · answer #1 · answered by Bostonian In MO 7 · 0⤊ 0⤋
Capital Gain
An increase in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price. The gain is not realized until the asset is sold. A capital gain may be short-term (one year or less) or long-term (more than one year), and must be claimed on income taxes.
Notes:
Long-term capital gains are usually taxed at a lower rate than regular income. This is done to encourage entrepreneurship and investment in the economy.
See also: Asset, Capital Loss, Real Estate, Return on Capital Gains
2007-03-01 17:45:52 · answer #2 · answered by Anonymous · 0⤊ 1⤋
Qoute
"A capital gains tax (abbreviated: CGT) is a tax charged on capital gains, the profit realized on the sale of an asset that was purchased at a lower price. The most common capital gains are realized from the sale of stocks, bonds, precious metals and property. Not all countries implement a capital gains tax."
end qoute.
Click on the 1. link & look at the USA section. it will help you to determine your tax liability.
The 2. link is how the IRS feels about capitol gains.
2007-03-01 17:41:00 · answer #3 · answered by low_on_ram 6 · 0⤊ 1⤋
In Australia capital gain (for tax purposes) only applies to investments like shares and rental properties which increase in value while we hold an interest in them.. We don't get taxed if we make a profit when we sell the house we have lived in over the entire period of ownership. .
I'm guessing you're in the same position. Good luck.
2007-03-01 17:49:53 · answer #4 · answered by miketwemlow 3 · 0⤊ 1⤋
capital gain is just another fancy word for saying that you're going to pay taxes on the profit that you made in the sale of your property usually you would be considered a long-term capital gain and in right now I believe that it's 15% but depending if you're on the lower 2 tax brackets it should be 5%...so in other words you will have to pay taxes on the profit that you made in the sale of you're property....
2007-03-01 17:45:25 · answer #5 · answered by lbjose81_gsa 1 · 0⤊ 1⤋
the money you get when selling something that exceeds what you paid for it. relates to houses, stocks bonds mutual funds ext ext
2007-03-01 17:40:30 · answer #6 · answered by MissKnowItAll 3 · 0⤊ 0⤋