Re:Why a house is a terrible investment (2013)
by DrScump on Sunday April 22, 2018 @09:17PM
(#16899797)
up to $250,000 of profit is tax-free
If your profit isn't 6 figures, choose this option carefully.
Re:Why a house is a terrible investment (2013)
by meritt on Sunday April 22, 2018 @09:44PM
(#16899909)
Under current law, you can take the exclusion every two years:
https://www.irs.gov/publications/p523#en_US_2017_publink1000...
Are you referring to the over-55-once-in-a-lifetime exemption that was replaced in 1997 with the introduction of the Taxpayer Relief Act? https://en.wikipedia.org/wiki/Taxpayer_Relief_Act_of_1997
It depends on how long you owned and lived in the home before the sale and how much profit you made. If you owned and lived in the place for two of the five years before the sale, then up to $250,000 of profit is tax-free.
If you are married and file a joint return, the tax-free amount doubles to $500,000. The law lets you "exclude" this much otherwise taxable profit from your taxable income. (If you sold for a loss, though, you can't take a deduction for that loss.)