Here’s an overview of what the capital gains tax is and how to avoid it
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Many homeowners are unaware that the capital gains tax law changed several years ago. The capital gains tax is a tax on the profit generated when you sell something such as stocks or bonds, but it also applies to tangible items like boats, cars, and real estate. The good news is that there is a $250,000 exclusion if you’re single and a $500,000 exclusion if you’re a couple filing jointly.
The bad news, however, is that you won’t be eligible for those exclusions if any of these conditions apply:
- You haven’t owned the home for at least two years
- The home hadn’t been your primary residence for at least two out of the last five years prior to selling
- You claimed another home as your primary residence
So, to avoid the capital gains tax, be sure to factor those criteria into your selling time frame. If you have questions about this or any other real estate topic, just give us a call and we’d be glad to help you. My team and I are on standby seven days a week, from 9 a.m. to 8 p.m. We look forward to helping you.