- My wife and I bought our current house just over 20 months ago, and we are looking to sell.
- When we sold our previous house, we made a profit of about 15K on it, but were able to exempt that because we lived there for 5 years.
- We bought the new house a few days before selling the old one so brought cash to the table for the down payment, then re-imbursed ourselves with the check from the sale of the old house.
- Its looking like we are going to make about another 20K selling the current house. We are not moving for any of the exemption reasons, so I don't think that we can exempt portions of the gains.
=>Correct;asyou can see, once you meet all the requirements for the exclusion, you can take the $250K/$500K exclusion any number of times. But you may not use it more than once every 2 years. during the 2-year period ending on the date of the sale of your old one, neither you or your spouse excluded gain from the sale of another home. Your gain is actually your home's selling price, minus deductible closing costs, selling costs, and your tax basis in the property. (Your basis is the original purchase price, plus purchase expenses, plus the cost of capital improvements, minus any depreciation and minus any casualty losses or insurance payments.)
I read somewhere that if you had Exemptable capital gains, but then bought and sold a new house in under 2 years so any additional capital gains were not able to be exempted, that you would have to pay tax on the gains from the same of both houses. I am wondering if this is actually the case, and what our capital gains tax liability will ultimately be.==>>yes as mentioned previously;
However, you who disposes of more than one residence within two years or who otherwise fails to satisfy the requirements, for example ONLY IF due to a job change or health problem, may qualify for a reduced exclusion amount. -
We are in the tax bracket where we would pay 15% for the capital gains tax, but we are trying to save as much as we can for a down payment on a future home, so the less we have to pay out the better.==> Long-term capital gains tax rates generally aren't terribly high -- and in some circumstances, you may pay nothing at all in taxes on your long-term gains.UNLESS your tax bracket is higher than 15%, No LTCG tax is owed;