If you have decided to sell a house or are in the process of selling it, you need to keep in mind that usually, there are taxes on real estate capital gains. Generally speaking, the higher the price you sell, the bigger your tax bill from Uncle Sam. There are some ways to avoid these taxes. Let’s take a look at everything you need to know about capital gains tax when selling a house. By understanding the capital gains tax laws, you can potentially avoid these taxes and proceed in a relaxed manner with your sale
The IRS always requests a piece of any transaction and money you bring into your accounts. The profits acquired from real estate are taxable by law. This is how they calculate the amounts:
Let’s look at a few examples. If you purchased a home some years ago for $100,000, and now you sold it for $450,000 while being single, your capital gain is $350,000. From this amount, $250,000 is not taxable. The remaining $100,000 in profit, however, would be taxable.
If you are married and bought a home for $500,000 and later sell the home for $800,000, there are no capital gains taxes due to only having a $300,000 profit. The $500,000 exclusion covers you from paying any taxes.
If you have more questions, reach out to a 1031 facilitator, a trusted tax professional, or a real estate attorney, or someone you know and respect in real estate.
As investors, we are in business to make a modest profit on any deal. However, we can help homeowners out of just about any situation, no matter what! There are no fees, upfront costs, commissions, or anything else. Instead, we offer the simple truth about your home and how we can help you sell it fast.
Give us a ring. We would love to help you understand the process and to answer all of your questions. You can reach us at 402 999.0577.