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Capital gains on sale of primary residence

A friend of ours said her sister sold their primary residence but were worried about getting hit with the capital gains tax. According to her they learned that if the seller is over 65 the capital gains tax is not payable. Is this correct or were they misinformed.

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Honored Social Butterfly

It has nothing to do with age - it is all about how much gain a person or a couple filing joint can exclude from the proceeds.  Remember when a person determines gain, you use the cost of the home + all the improvements, repairs and standard maintenance  to determine your cost basis.  Subtract that amount from what the house sold for less sales expenses that gives you your gain - then subtract the sell of personal residence excludable amount shown in this link -

$250,000 or $500,000 depending upon the tax filing status.

IRS Topic No. 701 - Sale of Your Home

 

BTW, the excludable amount is cumulative so the excludable amount is for a lifetime in case you buy and sell more than one personal residence in a lifetime.

It's Always Something . . . . Roseanna Roseannadanna
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