Question

Selling your home and avoiding capital gains on the sale

Forum|Forum|1 year ago
March 3, 2025
1 reply
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Purchased second home in 2024 before selling my first home. What are my tax implications when I sell the first home purchased in 2011? Currently, the home I purchased in 2024 is my primary and the home purchased in 2011 is listed as a rental.

T

ThomasM125

You would have to have lived in the 2011 home as your primary residence in two of the five years before you sold it for it to qualify for exclusion of up to $250,000 ($500,000 if married filing joint) of the gain from federal income tax. If you had been renting out the home, the gain on it would be fully taxable at capital gain tax rates, except for the portion attributed to accumulated depreciation, whose tax rate would be capped at 25%. Capital gains tax rates can vary from 0% to 20%, depending on your income.

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