Question

Capital gains on primary home

Forum|Forum|5 years ago
May 7, 2021
1 reply
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If a homeowner receives a capital gain of around $1MM on the sale of his home and is in the lowest tax bracket, does he avoid paying federal taxes on that sale? What about state (California)?

A

AmeliesUncle

No and no.

Capital gains are based on your tax bracket of your TOTAL income (including capital gains).

H

Hookem001Author

Thanks for the reply. I'm aware that tax brackets are based on total income, and not solely capital gains. My question is whether, if you are in the lowest tax bracket based on total income, does that eliminate your tax liability on a capital gain. My question is based on the table showing 0/15/20 tax rates in this link.

@https://www.investopedia.com/ask/answers/06/capitalgainhomesale.asp