Dallas, TX · Member since 2013 · 67 posts · 0 votes
Hi all,
I'm considering selling my primary residence which I have lived in for a year and a half. I bought it for $76,500 and figure I can sell it for $90,000. If I understand correctly, I can deduct the real estate commissions (5% of sale price) and improvement costs (approx. $1,500) from whatever the final sale price is in order to determine my gain.
In assuming my scenario, my gain is $7800 and I would be taxed at 20% ($1,560) leaving me with $6240 to pocket, correct?
Is there anything I'm missing or should take into consideration? Thanks for your help.
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
13y
Basically yes
You may be leaving other costs out of the selling side. Are yo paying any closing costs, like transfer or recordation taxes? These would also be deducted to calculate you gain.
More importantly how long has it been your primary residence? If it has been you primary residence 2 out of the last 5 years, you pay no tax on the gain up to $250K (?) gain.
Seattle, WA · Member since 2013 · 2 posts · 1 vote
13y
If your gain is less than $250K ($500K if you are married) and you have lived there during any 24 months of the last 60 months you won't have to track the costs nor will you owe any tax. They don't have to be all together either. You could have bought it as a rental but moved into it for a year after holding it a year, then moved to another home for 6 months, then back for six month, then somewhere else until you moved back for the last six months.
When I was little we moved all over the place on a regular basis. My parents always seemed to have one or more properties that met the test.