Sellers: Capital Gains

Overview

Though most home-sale profit is currently tax-free under the Internal Revenue Code, there are steps you can take to ensure you are not taxed or to mitigate any tax liability exposure.

Disclaimer

Profit on home sale usually tax-free

Most home sellers don’t have to report the transaction to the IRS because the profit does not exceed $250,000 for single taxpayers or $500,000 for married taxpayers. However, if you’re one of the exceptions, knowing the rules will help you hold down your tax bill.

turbotax addresses some of the most common topics, concerns, pivot points, & solutions:


Use this calculator to estimate the capital gains taxes that would be due as a result of the sale of an investment property or your primary residence. Although this handy calculator can help you avoid tedious number-crunching, it should only be used for a back-of-the-envelope approximation. You should not rely on this calculator in lieu of advice and guidance from a tax or legal professional.


The long-term Federal capital gains tax rate is either 0%, 15%, or 20% (assumed by calculator for worst case scenario) as of 2019, depending on this income schedule.

Tax Rate: Single Taxpayers Married Filing Jointly Heads of Household
0% $0 – $39,375 $0 – $78,750 $0 – $52,570
15% $39,376 – $434,550 $78,751 – $488,850 $52,571 – $461,700
20% $434,551 or more $488,851 or more $461,701 or more

Because California does not give any tax breaks for capital gains, you could find yourself taxed at the highest marginal rate of 12.3 percent, plus the 1 percent Mental Health Services tax. This is maximum total of 13.3 percent in California state tax on your capital gains.


For more information – call 888-529-6632 or Email

Everyone’s situation is different so call or email for a complimentary review. Our aim is provide you with baseline information and advice so you can make informed decisions.

To learn whether you have a gain or loss on the sale of your home, refer to:

For general information on the sale of your home, refer to: