Is it true that you can sell your home and not pay capital gains tax?

Real Estate, Taxes
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4 weeks ago
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Yes, under certain circumstances it is true that you can sell your home and not incur capital gains tax. You must meet 2 tests, in general, to avoid capital gains of up to $250,000 on your primary residence or up to $500,000 if you file jointly. You must have owned and used your home for 2 of the 5 years prior to its sale. See this excerpt from the IRS website: “In general, to qualify for the exclusion, you must meet both the ownership test and the use test. You are eligible for the Section 121 exclusion if you have owned and used your home as your main home for a period aggregating at least two years out of the five years prior to its date of sale. You can meet the ownership and use tests during different 2-year periods. However, you must meet both tests during the 5-year period ending on the date of the sale. Generally, you are not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home. Refer to Publication 523 for the complete eligibility requirements, limitations on the exclusion amount, and exceptions to the two-year rule.” And please be sure to check this link for full details:   https://www.irs.gov/taxtopics/tc701.html.  

Charlotte Dougherty is a registered representative of Lincoln Financial Advisors a broker/dealer (Member SIPC) and a registered investment advisor. Lincoln Financial Advisors does not provide legal or tax advice. CRN-1584099-090116

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