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Posted: 12/27/2012 10:34:42 AM EDT
Example for use of easy round numbers:

I earn $100,000 a year before taxes. I bought a house for $200,000 on New Years Day 2009.

I sold that house for $300,000 on New Years Day 2012. 3 years later.

How does capital gains/tax figure into the equation?

Thanks
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Link Posted: 12/27/2012 10:41:24 AM EDT
[Last Edit: 12/27/2012 10:46:26 AM EDT by hammet]
nevermind.
Link Posted: 12/27/2012 2:06:49 PM EDT
The OP will pay taxes on the gain in value in the house, at the capital gains tax rate, unless some exemption applies (there are several possible exemptions).  The OP will pay ordinary income tax rates on the rest of his income.
Link Posted: 12/27/2012 3:14:08 PM EDT
Assuming you haven't sold a personal residence recently, you should be able to exclude all of that gain under IRC section 121.
Link Posted: 12/27/2012 4:34:48 PM EDT
Originally Posted By spqrzilla:
The OP will pay taxes on the gain in value in the house, at the capital gains tax rate, unless some exemption applies (there are several possible exemptions).  The OP will pay ordinary income tax rates on the rest of his income.


THX

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Link Posted: 12/28/2012 2:53:55 AM EDT
[Last Edit: 12/28/2012 2:54:15 AM EDT by Orion_Shall_Rise]
Originally Posted By variable:
Originally Posted By spqrzilla:
The OP will pay taxes on the gain in value in the house, at the capital gains tax rate, unless some exemption applies (there are several possible exemptions).  The OP will pay ordinary income tax rates on the rest of his income.


THX

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If it was your primary residence 2 of the last five years it is exempt up to 250k per person
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