(Not inteded as legal tax advice)
This general information is to help a home seller better understand capital gains taxes. We recommend you contact a professional tax consultant for specific details regarding the selling of your Colorado Springs home.
When you sell a stock, you owe taxes on your gain-the difference between what you paid for the stock and what you sold it for. The same is true with selling a home (or a second home), but there are some special considerations.
How to Calculate Gain
To calculate this:
1. Take the purchase price of the home: This is the sale price, not the amount of money you actually contributed at closing.
2. Add adjustments:
3. The total of this is the adjusted cost basis of your home.
4. Subtract this adjusted cost basis from the amount you sell your home for. This is your capital gain.
A Special Real Estate Exemption for Capital Gains
" You have lived in the home as your principal residence for two out of the last five years.
Also note that as of 2003, you also may qualify for this exemption if you meet what the IRS calls "unforeseen circumstances," such as job loss, divorce, or family medical emergency.
DON'T MISS A NEW LISTING AGAIN!
FREE AUTOMATED EMAIL UPDATES