Capitol Gains on 2nd Home

stir_fryi SE Mich

15 years ago

Anyone know what the capitol gains tax rate would be for a vacation home purchased in 1998?

I am confused if it is 15% or 25%

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Comments (5)

C Marlin
15 years ago
Long term capital gains is 15%.
metromom
15 years ago
that's right
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sallen2008
15 years ago
Two years ago my brother, sister, and myself sold the house we inherited from our mother. Is that consider my first home sold? We are ready to sell the house we are currently living in.
partst
15 years ago
Sallon2008ÂÂÂÂÂ

No to qualify for this tax break your first house would be the one you have owned and lived in for at least 24 months. The house you sold with your sibling was inherited. With the step up in value you received no capital gains would be due unless you sold it for more than that appraised value. Unless you sold it for more that the limits for capital gains. If I remember correctly the limits are $500,000.00 for a married couple and $250,000.00 for singles.
brickeyee
15 years ago
"Two years ago my brother, sister, and myself sold the house we inherited from our mother. Is that consider my first home sold? We are ready to sell the house we are currently living in."

Why would it matter if it was a first house?
The inherited house was not eligible for the 2 of 5 year exclusion unless you lived in it as a principal residence.

You received a stepped up cost basis on the house on the date of death (or alternate evaluation date) and the estate payed any taxes due.
Only if you then sold the house for more than the value had when you inherited it is there any tax due.

As long as you have lived in a house for at least 2 of the previous 5 years you get a $250,000 per person ($500,000 for a married couple) exclusion for any profit on the sale of a house.
You can only use this every 2 years though.

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Capitol Gains on 2nd Home

Comments (5)

C Marlin

metromom

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