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How to Avoid Capital Gains Tax When Selling Real Estate (2023) - 121 Exclusion Explained

Navi Maraj, CPA 102 views

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I am a widower, i didnt ask to be a widower, i have not re married and i would expect that i would qualify for $500,000 otherwise i would consider this to be discriminatory on its face for obvious reasons
Comment from : @Lee-fe2kh

$250K and $500K need to be increased In certain parts of the country tax obligations can be massive and these exclusions are simply not enough
Comment from : @DriveForShow

Thank you There’s a couple other exceptions on the 5 year test period: active duty military, intel community or foreign service; and divorced, under IRS publication 523
Comment from : @locuazz13

Not much help as it does not show how to fill out From 8949 and schedule D (1040)
Comment from : @gvet47

What if i sold a piece of land 😢 i got a 1099s for 250,000
Comment from : @CINDYTURRUBIARTES-v7u

Thanks for the greatly informative video, Navi! Quick question if I may What if you owned the house for 20 years lived in it for 15 and rented the last 5? Would you qualify for the exclusion if you go back to live in your house for 2 years before selling it? TIA :)
Comment from : @sfnyc

I am 73 have own my home for 30 years and I am single make under 18,000 a year but if I get married before the sale of my home can I still take the 121 married deduction ? After paying any other taxes paid to the IRS and if i got divorce would that be a problem for me
Comment from : @maxxonetwo3

If you are exempt from capital gains tax do you still need to file the sale of your home on your tax return?
Comment from : @jennybearcleans

Best video explaining capital gains Thanks!
Comment from : @Matt-x5x3q

hi single I lived in my house for 15 years bought for 500k selling for 15 million so 1 million profit how long do i have to buy another home before i get hit with capital gains ? and is it worth it to put 20 on a new house and invest on the rest of the money ?
Comment from : @kota11334

Question about taxation on escrow holdback proceeds How are the proceeds from escrow holdbacks treated when received in a different tax year than the sale of the home This is different than installment sales brbrbrFor example, a $500,000 home is sold with a $100,000 cost basis A $250,000 121 exclusion is used by the single homeowner with no other income creates a taxable $150,000 capital gain brbrbrThere is a $12,000 escrow repair holdback which is fully released (in a month) to the seller in the next tax year since closing was in the last week of the year What is the tax treatment of the $12,000? If received in the same tax year, it would have been part of the overall capital gains Is this true in the following tax year, ie is it 100 capital gains? Seems like a curious side effect is that the $12,000 capital gain has a 0 tax rate with no other income, but if received in the same year, it would have been at the 15 tax rate (part of a $150,000 cap gain) creating an unexpected tax savingbrbrbrInstallment sales have different rules requiring pro-rated basis calculations and may not apply Internet research comes up empty IRS customer service and CPAs have no clue Tax software I've used do not cover multi-year escrow holdbacks
Comment from : @DerekDokoto

We’ve owned our home in DL almost a year & my husband has a job offer back home , would this be excluded for a job relocation? Is it all excluded or partial?
Comment from : @KarenHernandez-rm6je

Thank you, always great information🙏
Comment from : @julhe8743

Not subbing to someone that cannot be bothered to answer viewers questionsbrVery dispicable
Comment from : @sueellenmcgoey

This is not right because as you might assume the property appreciates but the cash/dollar value depreciated
Comment from : @irfanfarid

So this 250k/500k exclusion applies at both federal and state level? I am in California
Comment from : @kirkhamster0024

This video is very helpful Thank you
Comment from : @MsAbsolute2009

What your number are you live in Australia
Comment from : @robeydhillon4244

thank you i am curious how this works with a duplex were i lived in half of it
Comment from : @TGAIP

Hi Navi How about if it's a rental property and we're planning to sell it? Is it different tax implication? Thanks in advance Navi!
Comment from : @mjj718

Hello! Thank you for your video We have lived in our house for 12 years we found a house we want to renovate to move into After moving to the new house (which will be my primary residence) I want to fix my existing primary residence and sell it Do I need to pay capital gain taxes if I sell my property within one year? If I qualify for the "2 out of 5 rule," do I need to report this when I do my taxes or it is not necessary? Thank you very much for your video! Have a blessed day!
Comment from : @rsanchez5179

I sold an investment property after 20 years During that rental period, I refinanced the property When I calculate the depreciation recapture tax, I add the closing costs to the purchase price when I bought the property My question is can I also add the closing costs to the purchase price from the refinance ? Thank you in advance
Comment from : @jimg9813

Thank you for the thorough video Do you have any video explaining how the capital gain tax will be determined through Seller-Financing transactions? Thank you
Comment from : @colinwu2684

What improvements goes torwards your cost basis , flooring , painting , kitchen remodel brThx u
Comment from : @natusfreedom472

In which form report the principal residence
Comment from : @gruiz4792

These standard $250K/$500K exemption amounts are ABSURDLY out-of-date, in most major real estate markets, in the countryespecially in CALIFORNIA, the tri-state metro regions of the Notheast & Florida It is long overdue, to adjust these amounts, every year, for INFLATION Of courseif Democrats (aka American Communists) take control in DC this yearDON'T HOLD YOUR BREATH
Comment from : @jamesmorris913

My dad gave me his home that was given to him Now he wants to buy it from me Do I have to pay capital gains taxes? Of course I’m selling it to him well below market value and gifting him the equity
Comment from : @BrianMason3636

Very informative, thank you!
Comment from : @stitchbystitch4188

Hello, I would like to know if this apply for investment properties?
Comment from : @christiansegura9102

I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them We can get by, but can't seem to get ahead My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for
Comment from : @Freddie-09

Thank you for explaining this very articulately and in an easy to understand video
Comment from : @Farhan_Kaka_Realtor

Question please… I understand that you must live in your home for 2 years as your primary residence Must you have owned that home for 5 years to qualify for the exclusion?brI bought my home exactly 2 years ago and has been my primary residence since July of 2022 Do I qualify? Or must I own the home for 5 years?
Comment from : @craigaverdung7805

I understand that I can defer cap gain tax if I buy a new home with the money from selling my current home, but what if I want to build a home?
Comment from : @georgehirvela7435

what if property is on mortgage ??
Comment from : @AnasKhan-uw7vf

What if you become disabled and yiu have to srll your house?
Comment from : @ll-qq9qr

Great explanation in mi opinion!brI have a question I lived in my primary residence for 14 years I bought 2nd house and I’m been living in it for 10 months now I’m planning on selling my first home so I still qualify for the tax exclusion?
Comment from : @JuanLuna-kc6fc

I just sold land I inherited for 170k I am not working and single I have no income so does that I do not have to pay capital gains?
Comment from : @marinascott-mw9ut

Thank you so much
Comment from : @robertlorenzo5166

DON’T FORGET THIS VERY IMPORTANT FACT … You will owe $0 capital gains tax if you make less than $44k single and &89k married 👍🏼
Comment from : @sonhuynh8222

This video was incredibly helpful and informative, thank you!! You just gained a subscriber!
Comment from : @dominiquelee8514

Would be nice if they thought us this in school, good job Navi 💖💛💚
Comment from : @STARSFashionArtLove

I need someone to help me understand inheritance home Is tgere a CPA that can help with buying or selling my sibling out the home eas paid off in 2001 (owned since 1972) i want the taxes split between us, when it comes to the sale if we sell out our portion Im not sure how to calculate or do this so that i dont lose money in the split
Comment from : @Hellohihowdyaloha

Great video! Really appreciate the knowledge Are you planning to do any videos regarding 1031 exchanges? Specifically, we are looking to sell a home that is of greater value than the one we are planning to purchase Thanks!
Comment from : @nayangovan9296

I just sold my house and was not aware that I could deduct closing costs from the purchase price So good to know, thank you
Comment from : @brandiglitz8415

Does your adjusted gross income effect the percentage of your capital gains tax?
Comment from : @deborahsavageshaffer6846

Hi Navi,brThanks for the useful video Can you please elaborate how job relocation impacts this 121 exclusion?
Comment from : @shopnpdekhi

How do you prove that you've lived there the 24 months?
Comment from : @JRspeaking

Excellent, detailed video! I have a question If my regular income (single filing) is 37k and I gain over 250k in capital gains Do I pay capital gains taxes on a house I sold that lived in for four consecutive years? It's a rental I live in the same house as tenantsbrAlso, I'd be spending most of my gains on a new home I live in the state of Rhode Island I messaged my accountant but he has not answered me I'm not sure @ should sell or not I've owned the property for decades Thank you!
Comment from : @CatsAreNiceMeow

'living there' do they check if you are physically inside the home? or can it just be your main mailing address?
Comment from : @careymeaway2024

Do you have any videos showing how to take the carryover schedule E rental losses against the capital gains of the sale of the rental property? My software continued to show an unallowed loss
Comment from : @CeciliaMarieAngela

You didn’t say what it would be if it is above 500,000 Like here in california What if you have above 500,000 in your sale of your homestead
Comment from : @victorcervantes6300

Can I use a 1031 exchange for another property if my capital gains are over my exclusion amount ? Example I’m filling single and I have over $350k in capital gains I like to use $100 as down payment on another property
Comment from : @rubengonzalez-qk6bx

Thank you for this video Very easy to understand One question remaining is, I have a condo in California and will have greater gains than the $250k But, if my income is less than a certain amount, can I avoid paying any gains whatsoever? In tax year 2024, what is that amount for a single person?
Comment from : @iamnavkaur

Great video - Thank you for sharing!! are there any federal taxes to consider? I see a comment below referencing to that
Comment from : @giannag_realty

What if the property is a rental?
Comment from : @lyad3618

How about if the son is selling mom's house She is 90 and living with son How much capital gains? Mom is a widow
Comment from : @reniemuratore8155

I have a question I lived at that property for three years and I did a loan called FHA203K I got that loan because the house needed some upgrades they gave me a loan I think it was like $20,000 to do the upgrades in the house and the repairs The balance for the loan was 370,000 and I ended up selling it for 537,000 The remaining balance of the loan was 350,000 now the question of mine is can Iuse the $20,000 that I got from that FHA 203K loan as a deductible for the repairs that I did to the house
Comment from : @gabygol70

I was just informed that if I tear down down my existing home (which I have owned and still live in for 30 years) and decided to rebuild a new home on the same lot, so I can resell and move to another state, that I do not qualify for the capital gains exclusion (Gates VS IRS), due to not living in the new home Is this correct? If so will I be taxed long term capital gains or Short term Capital Gains?
Comment from : @loreleihappel9901

My spouse left me our CA house as part of a divorce settlement We had lived in the house for ten years If I sold the house, would I qualify for the $500K exemption?
Comment from : @Brightly747

Married couples have a $500,000 capital gains exemption on the sale of their home in CA
Comment from : @stuartwood5571

Hi! Great video!!! What do you know about FIRPTA? As a non-resident, can it be avoided?
Comment from : @florencerichaud8639

My grandpa sold me his house in 2014 for $1 He purchased the house in 1965 for $24,000 But now the house is worth just under 1 million I’m in contract My lawyer will be holding capital gains tax in escrow Wondering if I am just to go with her calculations? I could probably ask her this… But I don’t want to offend anyone, and I just want to make sure that I am paying the least amount of capital gains I can Last question, I took out a home equity line of credit and completely renovated The basement totaling just over $100,000 That’s not a mortgage… But a loan, can I deduct that since I improved the property?
Comment from : @natimarivelez

are capital gains and Federal Capital Gains the same?
Comment from : @wandaalger6845

is this USA or Canada?
Comment from : @riasat001

We have a loan for $114k but our home is bow worth almost $300k I feel like we need to get a new home because we dont have enough bedrooms now Is there a way to just like Switch our mortgage to a new property and keep our 3 interest? My husband is worried we will have to get a brand new mortgage with a way higher interest rate Please help I am desperate here
Comment from : @nicolereadstarot

Do you have to buy another house with the proceeds from a sale to avoid paying tax or can you just stuff the money in the bank?
Comment from : @callmeishmaelk767

Super video!
Comment from : @glennirwin4710

What is your single , live in home 10 yrs ,home has loan 300k heloc 100k , sell house for 700k , what is the realized profit 300k ? Taxable capital gain ? 300k -250k exempt , so 50k taxable gain brCorrect me if I’m wrong
Comment from : @zeekflash6924

Can the taxes you paid throughout the time you owned the property included as Adjusted basis, or that's the reason you have the section 121 exclusion?
Comment from : @andrewwyllie5397

What if the property being sold is land and you did not live there How does that change the calculations?
Comment from : @jollymon6672

Are there exclusions from capital gains for medical reasons? My wife and I live with her mother who has dementia My wife and I are moving but we have to bring her to take care of her Is there an exemption that she can get on her capital gains when the mother sells the house?
Comment from : @TheK9Shepherd

Great video We have owned our home for 25 years with 3 renovations done many years ago Is there any present value adjustment that can be used for improvements done years ago?
Comment from : @Jimbojoebob

Question, I bought my house 2 years ago and lived there since If I sell it, can I still take advantage of the 121 exclusion if I haven't owned the house for over 5 years? thank you
Comment from : @jesusvela2624

Great explanation!
Comment from : @ScarfaceMartinBeats

This is US 🇺🇸
Comment from : @juliafisher5844

Is this in 🇨🇦 or 🇺🇸?
Comment from : @benjamins8082

How does capital gains figure in with an inherited home that's in trust when it's sold? There are 8 siblings all over the age of 625 yrs Old ? Does the 121 exclusion rule apply individually to each person receiving proceeds from the property sale? If not, how would we avoid paying tax on our share of the sale proceeds?
Comment from : @robino5340

So how do they calculate what tax bracket you are in? Is it just how much you make a year at your job or do they include the amount that you made on the sale of the house in that? So say you make 50,000 a year you’d be in the 0 tax bracket for LTCG but if you made 600,000 on the sale of your house is your tax bracket now 650,000 so you’d be in the 20 tax bracket ??
Comment from : @codyd4711

When does the two years begin? 1) when the land is purchased or 2) when the house is built If the IRS uses when the house was built is it when the purchase contract was signed with the builder or when the certificate of occupancy is issues?
Comment from : @fredandaylinenotsaying3810

So if my income is less than $29K, am I correct to assume I pay No Capitol gains taxes on the sale of my home as a single person?
Comment from : @lavellnutrition

What if we are selling a commercial building that has been our private residence for over 10 years? We did have it zoned as residential a few years ago with the county property assesors office What would be our capital gains scenario? Thank you :0)
Comment from : @skb2154

Question: Me and my wife are selling are home and relocating across the country and getting a new jobWe have gained some equity by fixing it up, right now it would be about 22 months just short of the 2 years, do you know if we would still have to pay taxes?
Comment from : @brianprelgo4553

Navi, Can you please elaborate on how CG works for someone who is widowed, AND something you didn't mention, age as a factor? Is there any exclusion for someone over 80?
Comment from : @sarahmyers102

Hello I live in Arizona and about 2 years ago I turned my condo it into a rental property and its being rented ever since Before it was rented, I lived in it for 2 years I plan on selling this place next month Do I still qualify for the 2 out of 5 rule although the property has been being rented for the last 2 years?
Comment from : @shawn7283