Do You Pay Taxes When You Sell A House – Welcome to the Clark Group Planning Minute, where we discuss topics related to retirement and financial planning (1-2 minute read).
Clients often ask us about the appreciation of their homes, also known as capital gains, and whether they will be taxed when they are sold. Under the tax law, the IRS has a provision called the Section 121 Exclusion, where you can exclude up to $250,000 or $500,000 of capital gains when you sell your primary residence. $250,000 if filing as a single taxpayer or $500,000 if filing jointly with a spouse. In order for a taxpayer to qualify for the capital gains tax exemption, they must have lived at home for 2 years out of the last 5 years. But the years don’t have to be consecutive, they have to add up to 24 months in the last 5 … Read the rest