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What income taxes do I pay when I sell my house?

What income taxes do I pay when I sell my house?

If you sell your primary residence, you may be able to exclude all or a portion of the gain from the sale from your income for tax purposes. This exclusion is available to individual taxpayers who meet the ownership and use tests for the property.

To qualify for the exclusion, you must have owned the home for at least two years (the ownership test) and you must have used the home as your principal residence for at least two years (the use test) during the five-year period ending on the date of the sale. If you meet both of these tests, you can exclude up to $250,000 of the gain from the sale of your home from your income, or up to $500,000 if you are married filing jointly.

If you do not meet the ownership and use tests, or if you sell a home that is not your primary residence, you may have to pay capital gains tax on the sale. The amount of tax you will owe depends on your tax bracket and the amount of the gain.

It’s important to note that the exclusion for the sale of a primary residence is not available to everyone. There are some special rules and limitations that may apply to the exclusion of gain on the sale of your home, so it’s a good idea to consult with a tax professional or refer to IRS Publication 523, “Selling Your Home,” for more information.

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