Will I Owe Taxes on the Sale of My House?
October 5, 2006
Q: How do capital gains taxes work? I want to sell my home, but have only been there for 18 months. How much will I have to pay in capital gains tax? Is two years the shortest time I can stay in my house without having to pay capital gains tax?
A: Generally, the sale of your principal residence is not reported on your tax return unless you have a gain on the sale and you do not qualify to exclude the gain.
Exclusion: You can exclude from your income up to $250,000 ($500,000 for taxpayers filing Married Filing Joint) of the gain from the sale of your home if you meet the following conditions:
- If you have owned and used the home as your principal residence for at least two out of the last five years prior to sale, and
- You have not sold another home in the last two years.
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