Good Afternoon,
I am selling my home, but not ready to purchase another just yet. The home is valued at 310,000 and we owe 123,000.
This also involves a situation - my ex-wife and I are still on the deed, she is currently in the residence. We are in agreement on the sale.
Will we owe capital gaines tax after we spit the proceeds of the sale?
You won’t owe anything for capital gains. Even if you only paid $100,000 your gain would be $210,000. The exemption limit is $250k for a single person and $500k if married. You are good either way as long as you lived there for 2 years.
but doesn’t the sale still trigger a form to the IRS? They don’t know if it was your primary home or a vacation home, or investment property… I thought you’d still have to go through the paperwork, but end up not owing.
also – do most states follow the IRS rules for CG on a house? I guess that some states have no tax at all, but I know that some do…
No, the exemption is $250k for an individual and $500k for a married couple so either way you are covered.
You may want to read IRS Pub 523, Selling your Home, to see how the rules fit your situation.
That’s only if it’s your primary home and you lived there a certain number of years in the past 5 years.
Lots of people try to declare their shore houses or investment rental property as their “primary” residence.
Correct. But there was nothing from the OP to indicate that it was being used as anything other than primary residence.