Subject:  Federal and State Tax Consequences of principal Residence Sale
From:  Mark
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?

Thanks again,
Mark

Answer

Date:  Fri, 2 Apr 2004

Hello Mark,

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.

Good luck!
Mike Gray

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