Pay Reduced Capital Gains Taxes If Your Job Makes You Move


Pay Reduced Capital Gains Taxes If Your Job Makes You Move
By Scott Rogers • November 30, 2007
Capital gains are gains on assets that had been held for over one year before being sold. Roughly speaking, if you purchased your home for $200,000 and are selling it for $250,000 you have netted $50,000 of capital gains. This profit is taxable, with one significant exclusion. If, in the 5-year period ending on the date of the sale, you have: - Owned the home for at least 2 years (the ownership test), AND - Lived in the home as your main home for at least 2 years (the use test). then you will generally only be taxed if your gain is more than $250,000 ($500,000 if married filing a joint return). Yes, you really are exempt from any and all taxes on this profit. If you are selling your home less than two years after you bought it, or within two years of selling another home and claiming a capital gains exemption, you may still be able to reduce the amount of gain upon which you will be taxed. This is possible if you sold the home because of: - a change in place of employment - health - unforseen circumstances Per the IRS, "For this purpose, employment includes the start of work with a new employer or continuation of work with the same employer. It also includes the start or continuation of self-employment." The only other stipulation on the change in place of employment is that the move is greater than 50 miles. The IRS has volumes of information on this topic located here --- where you'll even find the worksheet and calculations to use to determine the amount of your potential tax liability. Receive Updates by Email Recent Articles: There Are Plenty Of Types Of Houses That Exist That Just Are Not Available To Purchase Home Sales By Price Range In The City Of Harrisonburg Are You Compromising On Aspects Of Your Next Home That You Can Or Cannot Change Later? How Much Slower Are The Winter Months In Our Local Housing Market? Rockingham County and New Home Sales Drive Surge in Area Housing Market Find The Balance Between Optimistic And Realistic Home Pricing Room Size Is Difficult To Understand Solely From Real Estate Photos How Much Would You Value Not Having To Prepare Your Home For Showings? One Out Of Four Homes Is Taking Longer Than A Month To Sell Consider The Cost Of Your Planned Renovations When Planning Your Offer
Have any questions? Contact Scott Rogers at 540-578-0102 or scott@funkhousergroup.com
Based on information from the Harrisonburg-Rockingham Association of REALTORS® or its MLS, for the period Jan 1, 2000 through Nov 21, 2024 (unless otherwise noted).
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