Category Archives: Home Seller’s Insights

Topics relevant to sellers

Maximize Your Real Estate Gain

Tax Free Capital Gain 

Preserving the equity in your home is financially prudent. Whether you are selling to buy another property, or selling to make a lifestyle change, it is prudent maximize your tax savings. By exempting some or all of the gain, i.e. profit, from capital gains tax you pay on the sale of real estate, i.e. you principal residence you can preserve the equity in your home, and your enhance your ability to buy a replacement home or use the sale proceeds for other purposes.

California Difference

For those of you in California, remember that California taxes all real estate gains as “ordinary income.” In other words, the California Revenue and Tax code does not offer a reduced tax rate on capital gains from the sale real estate or any other property.

Ownership Requirements

When you sell your home, some or all of any profit – capital gain – you make may be “tax free.” To take advantage of a tax-free gain you must meet both of the following requirements:

1. The house you sell must be your main home or “principal residence.”
2. You must have owned, and lived in, this home for at least two of the past five years.

The following example and blank worksheet may help you calculate your taxable capital gain:

If you need more information about selling or buying a home, or other real estate and tax matters, please call Frank Gerald Adam, Attorney, CPA, Licensed Real Estate Broker

Not intended as legal or tax advice – tax laws are complex, and the above formula may not apply to all situations – please consult your CPA or tax advisor.

© Copyright, Frank Gerald Adam, Esq., CPA 2005 – 2017

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