My reason for concern: if I earn enough to bump me above the 15% tax bracket, the 15% tax on the house profit will almost certainly wipe out the extra money and then some. The profit on the house can also push you through the 15% bracket.To the extent the capital gain would be in the 15% bracket, the tax on that gain is 0. If your other income puts you in the 15% bracket AND you have a large capital gain, only part of the gain is going to be tax free. For a large gain, any part of the gain that puts you over the 15% bracket is going to be taxed.And don't forget that the gain is still part of your AGI. So anything that is AGI-sensitive (like the medical deduction or the $25k allowance for rental losses or the taxable portion of Social Security benefits) will be affected by the gain.The calculation is a bit tough to explain, but if you follow through the worksheets for schedule D, you'll get the right results. I'd suggest doing some actual projections with estimated numbers to get a feel for what the tax will be on your capital gain.--Peter
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