Capital gains in laymens terms

[ARCHIVED THREAD] - Capital gains in laymens terms

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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Posted: 12/27/2012 10:41:24 AM EDT

[#1]

nevermind.

Posted: 12/27/2012 2:06:49 PM EDT

[#2]

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.

Posted: 12/27/2012 3:14:08 PM EDT

[#3]

Assuming you haven't sold a personal residence recently, you should be able to exclude all of that gain under IRC section 121.

Posted: 12/27/2012 4:34:48 PM EDT

[#4]

Quoted:
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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Posted: 12/28/2012 2:53:55 AM EDT

[#5]

Quoted:

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

[ARCHIVED THREAD] - Capital gains in laymens terms

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