Capital gains tax?
In the past, you only had to report 40 percent of your gain on a real estate property if owned for a year are more. What’s the current rule?
- SlickterpLv 71 month ago
No federal gains tax on profit under $250K on your residence ($500K if MFJ) so long as you lived in it 2 of the last 5 years.
- A HunchLv 71 month ago
The Tax Reform Law of 1986 created the distinction between long term and short term capital gains. This eliminated any exclusion for a certain percentage of capital gains held more than 1 year and created the two tier capital gains rate we have today.
If you are saying that the exclusion was 40% in 1980 (based on another question) you are slightly better off today. Thus, you paid 28% on 60% of the gain.
long terms capital gains = 15%
short terms capital gains = ordinary income
$100000 in capital gains
In 1980, you would have paid $16800 in capital gains
In 2020, you would pay $15000 in capital gains.
If you have resided in the property as your primary residence, for 2 out of the last 5 years, there is a $250,000 exemption ($500K married). You can take advantage of this once every 2 years.