How much will I pay in Capital Gains tax?

[emcmillen]

I purchased a house in 2013 for $119k in Michigan. In 2014, exactly 12 months after moving in, my husband had to take a job out of state. We moved and rented it out. It has been rented out since. I'm selling it now for $145k. After all the fees I'll net about $133k. I file my taxes jointly with my husband and our AGI is about 57k. I'm trying to figure out how much we will have to pay in taxes after we sell the house?

 

[LdiJ]

I purchased a house in 2013 for $119k in Michigan. In 2014, exactly 12 months after moving in, my husband had to take a job out of state. We moved and rented it out. It has been rented out since. I'm selling it now for $145k. After all the fees I'll net about $133k. I file my taxes jointly with my husband and our AGI is about 57k. I'm trying to figure out how much we will have to pay in taxes after we sell the house?

If your selling expenses are 12k (make sure that its all valid selling expenses) then your capital gain would be 133-119 = 14k. Your capital gains tax would be 14k x 15% = 2100.00. That of course is just for your capital gains on the house. The rest of your income tax will depend on whatever deductions you might or might not have, and how much withholding you had.

 

[emcmillen]

What do you mean by "valid selling expenses"?

This article: https://blog.taxact.com/long-term-capital-gains-tax/ says that if my income is under $77,200 (filing jointly) then I don't have to pay the capital gains tax. Is that wrong? Do you know if the $77,200 includes the income from the sale or is that before the profit from the sale of the house?

The article also says, "One caveat does exist with the sale of personal residences. You may not have to pay tax on up to $250,000 gain from the sale of your home. That rule applies if you owned and lived in the house for at least two of the last five years or if you meet certain exceptions." I obviously didn't live in the house for two for the last five years, but do you know what the other exceptions are?

 

[Zigner]

Is your income under $77.2k?

 

[emcmillen]

Is your income under $77.2k?

My AGI was $57K for 2018...I doubt 2019 will be much different.

 

[FlyingRon]

There's more involved here. You should have been taking depreciation deductions for the time you rented it out and your capital gain will be computed as if you had. I'd get all your records to a tax professional (I'd wait a few weeks until the April 15 rush dies down. They won't be working on your issue yet anyhow.

 

[LdiJ]

There's more involved here. You should have been taking depreciation deductions for the time you rented it out and your capital gain will be computed as if you had. I'd get all your records to a tax professional (I'd wait a few weeks until the April 15 rush dies down. They won't be working on your issue yet anyhow.

I answered a slightly different version of this question for the OP somewhere else, and I completely forgot about depreciation....smacks head.