I sold my home; Do I have to pay taxes?

If you have a capital gain from the sale of your main home, you may qualify to exclude up to $250,000 of that gain from your income, or up to $500,000 of that gain if you file a joint return with your spouse. Capital Gain = (Sales Price - Closing Costs) - (Purchase Price + Repair/Maintenance + Closing Costs)

Qualifying for the exclusion:

Ownership and Use test: You must have owned and used your home as your main home for a period of at least two (2) years out of the five (5) years prior to its date of sale. Military personnel stationed away from their residence may qualify for ten (10) years.

What if it was a rental property?

You may still qualify for the capital gains exclusion if you meet the ownership and use test. However, you will be subject to depreciation recapture, which could leave you owing tax.

You’re NOT eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home.