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For contributing Roth IRA, does capital gains from a sale of a main house add toward MAGI?

Forum|Forum|4 years ago
February 16, 2022
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My income won't be over the Roth IRA contribution limit but I'm not sure if I need to worry about selling property of the main house. I understand it will be tax-free since I lived at the property for over 10 years.

Best answer by PattiF

No, you generally do not need to worry about the sale of your main house increasing your MAGI.

You can exclude a gain of $500,000 on the sale of a house if you are filing as married filing joint, or if filing as single, the exclusion from income is $250,000.

For example, if you purchased your house for $100,000 and sold it for $350,000 filing as a single person; then there is no capital gain income.

Publication 523 from the IRS has information about the sale of a personal home.

P

PattiFAnswer

No, you generally do not need to worry about the sale of your main house increasing your MAGI.

You can exclude a gain of $500,000 on the sale of a house if you are filing as married filing joint, or if filing as single, the exclusion from income is $250,000.

For example, if you purchased your house for $100,000 and sold it for $350,000 filing as a single person; then there is no capital gain income.

Publication 523 from the IRS has information about the sale of a personal home.

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