It can be hard to sell a house. It gets even harder when you’re not sure what you pay, and what your buyer does– or if you even have to pay the fees at all. While the value of the capital gains tax on your home is variable, it’s important to know what they are. If you sell a house fast for cash or using traditional methods, it’s actually likely that you may not even have to pay capital gains taxes.
What Are Capital Gains Taxes?
In the eyes of the Internal Revenue Service (IRS), your home is a capital asset, and that makes it subject to the capital gains tax. But what do either of these words mean? A capital asset is just a piece of property that’s worth a lot of money, like your car, your stock portfolio, or even expensive art pieces and collectibles you may have in your home. Anything that’s expensive enough is considered a capital asset. The IRS wants to capitalize on these expensive items, and so they introduced a capital gains tax, which means that you have to pay them whenever you sell something for more than you originally purchased it. If you sell a home and its value now is higher than what you bought it for, they’ll take a bit of your profits from the deal.
How Much Does Your Home Need to Be Worth To Prevent Paying These Fees?
Paying a capital gains tax is entirely reliant on how much your property was worth when you bought it, your marital status, and how much money you make in the average year. If you’re single and have lived in the house for two out of the last five years, your house can only have increased in value by $250,000 before you have to pay the taxes. If you’re married, file taxes jointly, and have lived in the house for two out of the last five years, that number can increase to a $500,000 value before you have to pay taxes.
Paying Taxes On A Home Sold For Cash
Whether or not you have to pay taxes on a home you sold can really just depend on who you are, whether you sell a home fast for cash or using a more traditional method. Based on your marital status, the value of the home when you bought it, and the price you sold it for, it’s highly likely that you won’t have to pay a dime of tax on the home. The biggest thing to remember, though, is that you have to have had the home as your primary residence for two out of the last five years- otherwise, your tax exemption doesn’t count.
If you’re in a situation where you’re asking yourself “How do I sell my home fast for cash,” we can help. We buy houses in Sacramento, Stockton, Modesto, and other cities around the area, and we can usually complete the sale within two weeks. Learn more about how we can help now.