03/15/2022
📣Lets talk capital gains:
🏡 Paying capital gains applies to homes, property, and possessions that you have had for OVER a year that earn you a profit when you sell them. The reason being when you sell something for a profit, it is treated as a commercial transaction when it comes to taxation.
🏘There is a possibility when selling your home that you won’t have to pay capital gains taxes thanks to exemptions built into the tax code.
How do you know if you qualify? 🤷♀️
🏘If you meet specific criteria, you are allowed to make $250,000 in profits when filing individually and up to $500,000 when filing jointly or as head of the household.
The specific criteria consist of:
👉The house must be your primary residence
👉You must have been the owner of the house for at least two years
👉Over the last five years, you must have lived in the house for more than two years
👉You haven’t claimed this exemption within the previous two years on another property
🏘 If you meet all the requirements, it is unlikely that you will have to pay capital gains taxes if the sale of your house is under those amounts. However, if you make any profits over those amounts, you will still have to pay capital gains. Also, if you don’t meet the specific criteria you will have to pay capital gain taxes and what you pay is different depending on your situation and income level.
Want to chat more? Send me a DM and we can get together to discuss!
