Do you have to pay capital gains tax off on the sale of a personal house?

ANSWER

Expert Michael Lim's Answer:

Possibly.  There are capital gains tax that can may be involved on the sale of a home.  However, if your home has been your primary residence for two years of the last five year period ending on the date of the sale or exchange, you may be able to exclude $250,000 of capital gains (the increase in value over and above your purchase price, plus the cost of any improvements).

This amount is doubled to $500,000, in the case of a husband and wife who make a joint return for the taxable year.

IRC Section 121.

Michael Lim, CPA

California

16 yrs experience

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128 Ans.