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Author: psm Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121585  
Subject: Taxes on Sale of a home Date: 4/13/2001 8:55 AM
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Based on some discussions with others, and the following exerpt from a Fool Article I have determined that I should not be required to pay CapGains tax on the sale of my home.

"The key to the entire plan is that you are allowed to sell a principal residence once every two years and exclude up to $250,000 ($500,000 for a married couple) of the gain on the sale."

I have lived in my home for (4) years, it is my only property, and my child would be forced to pay estate taxes if I were realize a $250,000 gain die to my massive heart attack.

The real question is will I have to pay income tax on the gain and at what rate? Any info would be appreciated.

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Author: pmarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 50185 of 121585
Subject: Re: Taxes on Sale of a home Date: 4/13/2001 9:17 AM
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I have lived in my home for (4) years, it is my only property, and my child would be forced to pay estate taxes if I were realize a $250,000 gain die to my massive heart attack.

The real question is will I have to pay income tax on the gain and at what rate? Any info would be appreciated


I'm not quite sure what you're asking, since the capital gain exclusion has nothing to do with estate tax, and if someone inherits your house, it comes with a basis of the fair market value as of the date of your death.

If you sell a home that has been your principal residence for 2 of the 5 years immediately preceding the sale, you can probably exclude $250,000 of gain. See Publication 523 for the "ifs" and details.

Phil Marti
VITA Volunteer

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Author: psm Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 50187 of 121585
Subject: Re: Taxes on Sale of a home Date: 4/13/2001 10:12 AM
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Sorry for the confusion. The estate tax comment was an attempt at humor.

The question is:

Even though I will get a capital gains exaption on the proceeds from the sale of the house, will it those proceeds affect the income tax I am forced to pay, either in increased income or higher tax rate?

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Author: pmarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 50191 of 121585
Subject: Re: Taxes on Sale of a home Date: 4/13/2001 11:49 AM
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Even though I will get a capital gains exaption on the proceeds from the sale of the house, will it those proceeds affect the income tax I am forced to pay, either in increased income or higher tax rate?

No. The excluded gain never even makes it into gross income on your return.

Phil Marti

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Author: pbpapa One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 50234 of 121585
Subject: Re: Taxes on Sale of a home Date: 4/13/2001 10:41 PM
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No, unless your gain is more than the exclusion amount, inwhich case it would be a good news bad news situation.

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