How much should I reserve for taxes on my home sale?
May 14, 2004
Date: Mon, 19 Apr 2004
My husband and I have lived in the same home since 1973. If we sold the home, we'd have a capital gain of about $1 million. Even with the $500,000 exclusion, there still will be a lot of tax (federal and California) to pay. I'm also worried about the AMT. Can you tell us how much to reserve for taxes?
Date: Fri, 30 Apr 2004
You are right to be concerned about the AMT. The California tax is not deductible for AMT, so you will be subject to that tax. You should reserve about 25% of the gain in excess of the $500,000 exclusion for income taxes.
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.
Find us on Facebook
Follow me on Twitter
Connect on LinkedIn
Connect on Google+