Video Summary
How do you avoid capital gains on the sale of your home when you sell your home? If you’ve lived in the home for two out the past five years owned and lived there, you can exempt up to $250,000 of gain. So that may avoid any capital gains tax. If you have a larger gain than the $250,000, then you will have to pay capital gains tax on any amount over and above that amount. If you’re married, you can exempt up to $500,000 in gain. And so if your house sells for less and you’ve lived there for two out of the past five years and owned it during that period of time, you can exempt it from even reporting to the IRS. However, if you do have to report the sale, you exempt the $500,000, of gain. And then if you have gained more than $500,000, you must pay long term capital gains. When you sell your home, it’s not subject to a tax deferred exchange that is only for investment property. And it is there’s many times a myth that people evidently this Smith’s been around for 50 years or more that if I sell my house and then I turn around and take the money and buy another house for that money, I don’t have to pay any gains on it. That is simply a myth and not true. If you have any questions, give me a call at (727) 847-2288.