How can I reduce the taxable income from selling my principal residence?
April 19, 2004
Subject: Federal and State Tax Consequences of principal Residence Sale
Date: Fri, 26 Mar 2004
My wife and I have lived in our home as our principal residence for six years and are now selling it for a net gain of $690,000. Are there any methods to avoid Federal and California tax consequences on the $190,000 in excess of the $500,000 exclusion?
Date: Fri, 2 Apr 2004
The $190,000 is a taxable long-term capital gain. Remember the federal tax rate for this will only be 15%. If you have any investments that you can sell for capital losses, sell them this year and offset the losses against the taxable gain.
We have more answers to frequently asked real estate tax questions! We also offer up-to-date information about new tax real estate tax developments in Michael Gray, CPA's Real Estate Tax Letter.
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