Capital Gains Limitations
I recently heard that there are limits on (Home Sale) capital gains if the property is not the primary residence? I was wondering if you had done an article on this topic.
Terry Says
If your property IS your primary residence, you can each (assuming joint tenancy and a joint return) exclude $250,000 of gains from taxes.
If the property is NOT a primary residence, you’ll pay capital gains taxes on any gains above your original cost (plus any permanent improvements). As of this writing the maximum capital gains tax rate is 20%. But it could be lower depending on your other income. Consult with your tax advisor on this. You may have to make an estimated income tax payment to cover the liability.
Also, if you are on Medicare, this gain could raise your Medicare Part B and D premiums (for both of you if you are married filing jointly).
