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
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

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.



Michael Gray, CPA
2482 Wooding Ct.
San Jose, CA 95128
(408) 918-3162
FAX: (408) 938-0610
Hours: 8am - 5pm PDT Monday - Friday

Find us on Facebook
Follow me on Twitter
Connect on LinkedIn
Connect on Google+
Our Blog
© 2018

Subscribe to
Michael Gray, CPA's
Real Estate Tax Letter!

We respect your email privacy

We respect your email privacy!