Captial Gains Help
After my wife and I got married we sold her house. We made money and did not reinvest that money because i already owned a home. What are my tax liabilities going to be. Both our homes are (were) primary residences.
Thanks for any help
If it was her primary residence, and she lived in it for at least 2 years (out of prior 5), most or all of the gains should be tax free (up to $250,000 in gains).
Thanks for the info... i was doing the research and that is what i was finding however reading tax code is difficult at best...
Let's clarify this a little more.
There are two parts to the two year ruleThe taxpayer must have OWNED the property at least two of the five years prior to the sale, and,
The taxpayer must have OCCUPIED the property as a primary residence at least two of the five years prior to the sale.
You can establish a primary residence without owning the property. The two years of ownership and the two years of occupancy do not have to be concurrent.
If your wife meets both requirements of the two year rule, then up to $250K of her profits can be excluded from capital gains.
Thankfully, Both of those situations are true.
thanks again for the help