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When do I pay capital gains tax?

My sister and I sold our two condos in August of 2017. Each condo sold for $170,000. We bought a condo for $270,000 with 20 percent down. When do we pay capital gains tax?

Real Estate, Taxes
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June 2018

In general, you owe capital gains on the difference between net proceeds ($170,000 less brokerage and closing costs) and your cost basis.  If one or both condos were rented as investments the calculation may be a bit complicated (depreciation, capitalized improvements, etc.) so consult your CPA.  But tax will be owed for the year in which you sold.

The exception is that the first $250,000 of gains on a home is tax exempt if that house was your primary residence for 2 out of the past 5 years.  If these two condos were the primary residences for you and your sister, then you will not owe capital gains tax at all.

The fact that you bought something else is irrelevant.

June 2018
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