How does capital gains tax work?
I am currently selling my home which was purchased in May 2017 at $315,000. I am hoping to sell it for $350,000. How much would I have to pay in capital gains taxes if it sells at that price and a realtor's fee of 6 percent would be considered? Alternatively, do I only have to pay capital gains taxes on the amount that I gained from the profits of the house?
Since you bought your house less than 2 years ago (you would have paid no taxes after May 2019) you are supposed to pay taxes on the net gains.
Because you are planning to sell at $350,000 less 6% sales commission ($21,000), you will end up paying taxes on the net gain of $14,000.
Since you held the asset more than one year you may end up paying lower (long-term) capital gain than ordinary short-term gain.
When you sell your home, you must calculate the capital gain you have earned for tax purposes. From your proceeds, you may subtract all your selling fees Next you can you update your cost basis by adding to your original purchase price all home improvements you have documentation to support. The difference between the adjusted proceeds and the adjusted costs basis is your capital gain. Ff this is primary home, the good news is that you are not going to pay any capital gains taxes at all. Current tax law exempts the first $250,000 in gains from taxes if you are single or first $500,000 in gains if you are married.
based on the time frame you have listed you will not yet qualify to set aside the gains on your primary residence because you have not owned it and used it for the last two years. However, because the ownership has been longer than one year you should be looking at long-term gains. In figuring out what the amount is you need to look at differences between the selling amount, $350,000 and purchase amount, $315,000, plus all expenses. Expenses can include commissions and upgrades to the house.