Do you have to pay a capital gains tax if you are 65 (or older) at the time you sell your home?

Answer 1

In this case, age is not a factor. The applicable section of the tax code is called a "Section 121 exclusion". Basically, $250,000 ($500,000 if married filing jointly) of a gain is excluded for tax purposes as long as you have used the property as your principle residence for at least two of the last five years. This is a tax exclusion and not a deferment. You will never be taxed on the excluded portion of the gain on the sale. Also, this exclusion can be used as many times as you want as long as you meet the principle residence requirement.

Example: A married couple buys a house in 1970 for $40,000. They live in the house continuously until 2007 when they sell for $400,000. Since they file taxes as married filing jointly, they can exclude the entire $360,000 and not be liable for capital gains taxes.

Example 2: Another married couple buys a house for $250,000 in 1996. They live in the house continuously until 2007 when they sell for $800,000. They file taxes as married filing jointly. This couple will have to pay capital gains taxes on $50,000 ($800,000 - $250,000 - $500,000 exclusion).

Answer 2

Being 65 doesn't have anything to do with whether you owe capital gains or not any more - that rule has been gone for years.

The current rules: If the seller lived in the house as his or her main home for at least two full years of the five years immediately before the sale, and owned the house for at least two full years of the same five, then up to $250,000 of gain is excluded from being taxable, $500,000 on a joint return. So unless there were huge gains, there wouldn't be any capital gains tax due. This is not restricted by age.

Answer 3

If you resided in the home for two of the past five years, and you owned the home for two of the past five years (the ownership and use don't have to be concurrent), you can exclude up to $250,000 in gain from income ($500,000 if married filing jointly). Otherwise, it's taxable income, treated as capital gains if you qualify for that treatment, otherwise it's ordinary income.

There are a bunch of qualifications and limitations. Most importantly, you can do this only once every two years. Speak to a qualified accountant or other tax professional.

The idea of using a 1031 tax-deferred exchange is not as good because 1031 just defers the tax, while the primary residence exclusion for ever and ever amen. Also, with the bankruptcy of the largest 1031 exchange company, one could say that the bloom is well and truly off the rose. It makes sense for big corporations that have all sorts of financial risk management tools at hand; it makes no sense for an individual, who likely will be ruined if the house disappears into a deepdark bankruptcy hole.

Answer 4

Your age has no impact on the tax liability that you may have. You have a $250,000 ($500,000 if married) if you have lived in the house 2 of the last 5 years.

Answer 5

Get Pub 17. Sale of your main home in which you have lived for two years; married, filing joint, you can sell it and make up to $ 500,000.00 in profit and pay no tax whatsoever.

Answer 6

As usual in these sorts of situations, the answer is "that depends."
If you or your spouse have ever used this exemption before (even if your spouse used it when not married to you), you may not use it again.
There are also limitations based on how long you have owned your home, how long you have lived in it, etc., and there is a maximum amount you can claim (it used to be $250,000, but it is now higher).

Answer 7

As long as it is your primary residence, usually no. However, check with a tax professional about YOUR specific tax standing.

Answer 8

no