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What is the capital gains tax exclusion? The tax break for homeowners is called the capital gains tax exclusion. It’s a federal benefit that allows you to exclude up to $250,000 of home sale ...
How To Calculate Short-Term Capital Gains. ... Capital Gains From Home Sales. Capital gains from your home sale are exempt from capital gains tax up to $250,000 filing single and $500,000 filing ...
As long as you lived in the property as your primary residence for 24 months within the five years before the home’s sale, you can qualify for the capital gains tax exemption.
Separately, the tax on collectibles and certain small business stock is capped at 28%. The tax on unrecaptured Section 1250 gain — the portion of gains on depreciable real estate (structures used for business purposes) that has been or could have been claimed as depreciation — is capped at 25%.
Say, for example, that you and your spouse file jointly and earned $150,000 in 2023. During this period, you also sold a rental property and have a long-term capital gain of $50,000.
The remainder of any gain realized is considered long-term capital gain, provided the property was held over a year, and is taxed at a maximum rate of 15% for 2010-2012, and 20% for 2013 and thereafter. If Section 1245 or Section 1250 property is held one year or less, any gain on its sale or exchange is taxed as ordinary income.
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