Question

What tax rate applies on capital gains on the sale of the main residence where the spouses have earned a combined gross income for the year of $30,000 - in California?

Forum|Forum|2 years ago
August 1, 2023
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TurboTax Online

Employee

It depends on how long you owned and lived in the home.

If you sold your primary personal residence and you lived in and owned the home for at least two years in the five year period on the date of sale, you do not have to report the sale if your gains are less then the exclusion amounts of $250,000 if filing Single or $500,000 if filing Married Filing Jointly (and both lived in the home for two years).

Gain or Loss = Sales Price minus Sales Expenses minus Adjusted Basis (Purchase Price plus the cost of improvements prior to the sale)

If you had a gain greater then the exclusion amounts then you would have to report the sale. Also, if you received a Form 1099-S for the sale either with a gain or a loss, the sale has to be reported.

L

lindamackellar-gAuthor

Thanks for replying.

- the sale needs to be reported as the gain is above the exclusion amounts

- primary residence, both spouses lived in the residence for the 2 years prior to sale (10 years)

- but what is the tax rate to be applied to the gain given their income level for the tax year (combined gross income of $30,000 not including the capital gain)

thanks