Capitol Gains Tax

How many years does a person need to own a house before selling it, and having to pay the capitol gains tax on the profit? What is the rate of the capitol gains tax?

Thanks,
Ed smile

Comments(1)

  • DaveT28th August, 2003

    If you own the house less than one year prior to the sale, the tax rate is the same as your ordinary income tax rate.

    If you own the house more than one year but less than two years, the capital gains tax rate is 15% if you are in the 25% tax bracket or higher; only 5% if you are in the 15% tax bracket or under.

    If you own the house more than one year, and it is an investment property (such as a rental), or a second home (not your primary residence), the capital gains tax rate is 15% if you are in the 25% tax bracket or higher; only 5% if you are in the 15% tax bracket or under.

    If you own AND occupy the house as your primary residence for two years (or more) of the five years prior to the sale, then your profits up to $250K per taxpayer are excluded from capital gains taxes.

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