If I Sell My Home, Will I Have to Pay Capital Gains Tax?

The IRS permits a maximum exclusion on capital gain of $250,000 for individuals and $500,000 for married couples filing a joint return who sell their home, but of course some conditions apply.

For the five-year timeframe prior to the date of the sale of your primary residence, you must meet the Ownership and Use Tests the IRS provides in Publication 523, Selling Your Home. These rules ensure you have owned the home for at least two years, and lived in the home for at least 24 months out of the last five years. Additionally, you may not have excluded a gain on your taxes from the sale of a different home within the last two years. Note that if you sell your property for less than your original purchase price, you cannot claim a capital loss.

A 'reduced maximum exclusion' can apply to those who must sell their home due to a change in their place of employment, health issues, or unforeseen circumstances that affect qualified individuals. In all cases, it is best to consult your tax professional or IRS guidelines if you have any questions about the taxes you may be responsible for if you sell your home.
Mortgage Interest Rates*
Rates as of Monday, 6th October, 2008:
  Conforming APR Payment per
$1,000		 Jumbo APR Payment per
$1,000
30-Yr. fixed 5.875% 6.013% $5.92 6.500% 6.596% $6.32
15-Yr. fixed 5.500% 5.730% $8.17 6.000% 6.156% $8.44
7-Yr. fixed ARM 6.375% 6.518% $6.24 6.000% 6.093% $6.00
5-Yr. fixed ARM 5.750% 5.887% $5.84 5.625% 5.716% $5.76
3-Yr. fixed ARM 5.750% 5.887% $5.84 5.500% 5.590% $5.68
5-Yr. Interest Only 5.875% 6.013% $4.90 5.875% 5.967% $4.90
*Rates are subject to change due to market fluctuations and borrower's eligibility.
Licensed Mortgage Banker, NJ Deptartment of Banking and Insurance. Corporation also services CO, CT, DE, FL, GA, IN, MA, MD, MN, MI, NC, NH, NY, PA, SC, TN, VA, & RI.
2 comments • Karl Peidl - Accredited Loan Consultant • October 06 2008 01:51PM