Whenever something you own is exchanged for a profit, that profit is called a capital gain.
When you sell your principal residence, you don't have to pay capitol gains tax up to a gain of $250,000 if you are single, and $500,000 if you're married. In order for it to be considered a principal residence, you must live in it for two years. You can only use this exemption one time in two years on a sale of one house.
If you are selling a rental, you have to add total Depreciation as well to the capital gain.
Depreciation = Cost of house (Puch. Price + Closing Costs) X cost of the building percentage (using the tax assessment divide the value of the house assessment portion by total assessment) divide it by 27.5 multiply by the number of years you had the property
When you sell your principal residence, you don't have to pay capitol gains tax up to a gain of $250,000 if you are single, and $500,000 if you're married. In order for it to be considered a principal residence, you must live in it for two years. You can only use this exemption one time in two years on a sale of one house.
If you are selling a rental, you have to add total Depreciation as well to the capital gain.
Depreciation = Cost of house (Puch. Price + Closing Costs) X cost of the building percentage (using the tax assessment divide the value of the house assessment portion by total assessment) divide it by 27.5 multiply by the number of years you had the property
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